Finance buying land or rather leave it?

Hi TroyRoy

When purchasing the property, you must of course consider that the bank will register itself in the land register (registration fee) and that depending on the federal state you will have to pay property transfer tax starting at 3.5%. Furthermore, various additional fees from the bank will also come up for you. That means, in your place, I would already be sure that it is definitely the right plot for the later house construction.
If this is the case, it is very good to be able to show a property you own when arranging the house financing later. However, I would not currently take out a variable loan, as it is not clear where the variable interest rate will move next. In any case, you can arrange an annual special repayment with the bank, even with a fixed interest rate loan. For the house financing, the loan for the property can then be covered with the newly agreed terms, and the installment can be spread over 35 years accordingly. So that the monthly burden is not too high.

Hope I was able to explain it somewhat understandably.

Best regards

In this option, however, you are tied to the bank that finances the property until the fixed interest period expires. Another bank will not want to be subordinate in the land register. Therefore, properties are usually financed with variable rates, so that the loan can be terminated on short notice and replaced by a full financing with any bank.

In the variant, however, you commit yourself to the bank that finances the property until the fixed interest period expires. Another bank will not want to be subordinated in the land register. That is why properties are usually financed with variable rates, so you can terminate the loan at short notice and refinance through an overall financing with any bank

With a fixed interest loan, a penalty-free special repayment can be agreed, so you could pay it off at any time. On the other hand, the bank that financed the property can also grant priority (entry of first rank) to the bank that finances the house. Due to the small amount financed, this is surely not a problem for the bank that financed the property.

Special repayments are usually 5% or 10%. Full early repayment is not common. And then there is the question of why the bank should agree to this, especially when giving another bank priority. With loans, the effort is relatively independent of the amount, so the bank earns little on a small loan of 60k. Something like this is the door opener for proper financing.

Special repayments are usually 5% or 10%. Complete early repayment is not common. And then there is the question of why the bank should agree to it, as well as to give another bank priority. With loans, the effort is relatively independent of the amount, accordingly the bank earns little on a small loan over 60k. Such a thing is the door opener for the proper financing

Right, if you don't negotiate with the bank, 5% or 10% is usual. Even if the bank does not grant priority, the property financing can easily be covered by the financing bank of the house construction with a small penalty payment. As I said, at the moment you cannot say where the variable interest rate will move, so I still recommend taking out a fixed interest rate to avoid the additional costs in case of interest rate increases.

On the other hand, the bank that financed the land can also give priority (registration of first rank) to the bank that financed the house. Due to the small amount being financed, this is certainly not a problem for the bank that financed the land.

It depends on the bank.. We financed a plot of land for 60k with ING, with an outstanding balance of just under 40k we wanted to finance the house construction and NONE of the banks we asked wanted to take second rank!

We then also financed the house construction with ING, I have to say, no one took advantage of the situation and imposed a horror interest rate or anything like that on us, which was a concern we had as well as many others!