Finance land and build later

Hi everyone,
in our Wunschdorf, planning for a new development area is currently underway. Based on the planning draft, we were able to reserve a plot of land. As soon as the sale of the plots takes place, we would like to finance the cost of the building plot of 64k as a variable interest loan through our regular bank. We will pay the incidental costs from the purchase out of our own pocket. The development should then take place in 2020 at the latest, but within any existing development obligation if applicable.
We want to avoid unnecessary extra costs and would like to ask you for advice on what to pay attention to in this case regarding the later major construction financing and the entry in the land register, etc.
Thank you!

You have already answered the question yourself. Variable loan and that’s it. You don’t need to expect great interest rate fluctuations until 2020.

The only question is: Will you have enough equity for the house by 2020? By then, the land probably won’t be paid off yet?

Regarding the notary and [Grundschuld] it is irrelevant. You convert the variable loan into a fixed loan that includes the land and house. Notary fees depend on the amount of the [Grundschuld] to be registered. No matter how you look at it, you can’t save anything.

Regarding equity, we are paying off the land and saving on the side.

The bank wants to register the property in the land register with amount X for the land financing. I do not know this year what total volume I will finance. So this year, the registration of the land value and next year a new registration including the house. The notary has to act twice and issues two invoices?

Correct

Example from the Interhyp calculator

Property purchase with 60k mortgage registration:

Certification of the purchase contract
€384.00
Execution of the transaction
€96.00
Other supervisory activities
€96.00
Certification of the mortgage/hypothec
€192.00
Subtotal
€768.00
plus 19% VAT
€145.92
Total notary fees
€913.92
Land registry fees
Priority notice of conveyance
€96.00
Change of owner
€192.00
Registration of mortgage/hypothec
€192.00
Total land registry costs
€480.00
Calculated total costs
€1,393.92

Later another mortgage in the amount of 300k
Notary fees
Execution of the transaction
€317.50
Other supervisory activities
€317.50
Certification of the mortgage/hypothec
€635.00
Subtotal
€1,270.00
plus 19% VAT
€241.30
Total notary fees
€1,511.30
Land registry fees
Registration of mortgage/hypothec
€635.00
Total land registry costs
€635.00
Calculated total costs
€2,146.30

All IN: €3,540.22

In comparison property purchase with 360,000k mortgage:

Certification of the purchase contract
€384.00
Execution of the transaction
€96.00
Other supervisory activities
€96.00
Certification of the mortgage/hypothec
€735.00
Subtotal
€1,311.00
plus 19% VAT
€249.09
Total notary fees
€1,560.09
Land registry fees
Priority notice of conveyance
€96.00
Change of owner
€192.00
Registration of mortgage/hypothec
€735.00
Total land registry costs
€1,023.00
Calculated total costs
€2,583.09

As said. With your variant, there is nothing to save.

But isn't it possibly more advantageous to initially finance the land flexibly and - once the required loan for the house construction is determined - then go to a bank with the entire amount (remaining debt on the land + required capital for the house construction)? What if the house bank is no longer the cheapest but is listed as the first rank in the land register due to the land financing?

Or am I overlooking something?

thanks for the calculation! I would rather put 1k somewhere else.

In the last conversation with the bank, it was mentioned to register a higher mortgage directly when purchasing the property. We have a first meeting with 2 BU next week anyway and will receive an approximate offer amount here, even if it will no longer be decisive for 2020. That would mean that the second trip to the notary can be omitted.

that would be my next question. Red Bank is the first priority, but next year Blue Bank is significantly cheaper and we want to do the large building financing with the cheaper one. How is this handled? The fact is that the financing bank inevitably wants to be first in the land register when purchasing the property.