Finance property in advance?

Hello everyone,

we want to build in 2-3 years. However, we could already now acquire a nice plot of land from the municipality. Since the land prices here are quite high (290€ / m^2), the plot will already cost a lot of money (142,000€). The question now is how I can bridge the time until the house construction financially in a sensible way.

I have already read all the threads on the topic and it is usually recommended to pay for the plot in cash, since otherwise you cannot afford to build. But this is not possible for me.

The situation is as follows:

Land costs: 142k€ + 10k€ incidental costs
Savings account: 50k€
House costs including incidental costs (estimated): 330k€

I also have a small condominium (approx. 45k€) that I rent out and can sell tax-free in 2 years. In addition, we are currently saving 1000€ / month in further equity. (This will of course slow down if we are already repaying the plot). That means when we are ready to build the house, additional equity will be available. However, not now.

What would you advise me? Two separate financings? Combine them later? Wait with the land purchase and hope to find a good one again in 2 years?

One aspect is that the interest rates are currently very favorable and in 2 years will certainly not be lower than today.

Thank you very much for your help.

Hello,

it would be worth considering financing the land now and the house construction later. The problem lies with the use of equity. It could be incorporated to a large extent. You should already look for a good financing partner now. Finding a second bank later for the house, which goes into subordination, is next to impossible.

What would you recommend to me? Two separate financings? Merge them later? Wait with the land purchase and hope that I find a good one again in 2 years?

One aspect is that interest rates are currently very low and in 2 years will surely not be lower than today.

Hello,
in that case a variable financing might be suitable. Then you can hope that the interest rates remain low for the next two years and afterwards you can possibly incorporate the whole thing into your home financing.

At the interest rate level, I would not enter into a variable financing. Nonsense

At this interest rate level, I wouldn't enter into a variable financing. Nonsense

Sorry, I absolutely don't see it that way.

According to expert estimates, the interest rate level is not expected to change significantly over the next 2 - 3 years. How could it, the expected economic growth also looks correspondingly "poor"...

A variable financing for the land has the great advantage that when the house construction is imminent, it can be repaid at once without any problems and thus transferred to the corresponding loan agreement for the house.

This way, you can choose the bank again freely and don't have to deal with issues like subordination etc.

If the property is located in a new development area, there is often the requirement that it must be built or at least started within X years (often 2). This must be taken into account in your plan.