Equity contribution in construction financing

What exactly do you mean by "count as own contribution"? 100 hours of gardening at a fictitious 10€ per hour = 1000€ own contribution?

You can calculate it like that… The point of discussion is always the hourly wage. According to your calculation 10 euros, craftsman’s wage with 50 + VAT, or somewhere in between,

But you can also calculate differently: Painting work upper floor costs according to architect’s calculation / painter’s offer 8,000 euros gross Material costs 3,500 euros gross

So you save 4,500 euros by doing it yourself Whether you need 100, 200 or 300 hours for that is completely irrelevant. The paint is on the wall afterwards and the property is worth more. So you can record this 4,500 euros as own contribution with the bank.

You can do this for every trade according to this plan. There is eventually a mental limit as to how much own contribution is feasible time-wise. For example 40 Saturdays x 10h = 400 h 4 weeks vacation x 40h = 160 h 40 weeks x 8h after work = 320 h Total 880h

That can definitely make a difference, even if it’s just the tipping point and turns an 81% loan-to-value into a 79% loan-to-value. Then the loan is quickly 0.2% cheaper.

That’s exactly how I see it too! That can already make a subtle difference.

We have contributed, for example, 6k euros of own work.

With a house value probably averaging T€ 500-600 for a new build (not a property developer with small terraced houses or the like), we're talking about approximately 1%. So it's negligible.

With a house value probably averaging T€ 500-600 for a new build (not a developer with small terraced houses or similar), we're talking about around 1%. So negligible.

With a new build costing €500,000 and a loan-to-value ratio of 90%, we're talking about €50k equity, which can be stretched well by €10k. That already amounts to 20% more equity.

And if you take 1.2 instead of 1.4% overall. With a financing volume of €500k over 30 years, that makes about €20k difference in interest costs.

But well, everyone can marginalize that as they please :)

In the case of a new build costing €500,000, and a loan-to-value ratio of 90%, we are talking about €50k equity, which you can easily stretch by around €10k. That’s already 20% more equity.

And if you pay 1.2 instead of 1.4% overall. For a €500k financing volume over 30 years, that’s about €20k difference in interest costs.

But well, everyone can marginalize that as they like :)

With every advisor, every normal bank (that you can actually talk to), that doesn’t matter at all. You get the appropriate terms or the corresponding loan amount, whether with or without trivial own contributions, if you want it.

And yes, as a banker, these own contributions don’t matter to me at all and don’t change financing. 10 or 12% equity – the difference is negligible.

It also has nothing to do with the scarcity of financing, but merely with not wasting money.

The experience here in the forum is different. Those who explicitly include working time for self-performed tasks have too little money. Of course, this is not representative ;)

Own contribution influences the condition. For the specified work, it would have to be very close for it to affect the interest.