Financing confirmation for equity

But the contract is already signed and apparently does not provide for a completion bond - otherwise there would not be this problem. Now he will hardly agree to it. Town & Country handles it the same way, I negotiated with them for a long time. There was no concession or alternative proposals, no completion bond either - however, with me it was before the contract was signed and therefore the contract never came about.

and apparently does not provide for a completion bond

That is not even being discussed here. It is about a down payment bond. That has nothing to do with a completion bond. And the general contractor himself even suggested that the equity could be provided as a down payment. And what exactly is stated in the contract has not been mentioned at all. We are not discussing that either – even if there might be a solution included there. The equity could also be deposited into an account with joint authority to dispose. Then both parties have the security that the equity is neither withheld nor used outside of the construction project. There are plenty of pragmatic solutions. However, as a banker, I have never issued a financing confirmation beyond the financing amount – regardless of which construction company. And a good solution has always been found.

Correct, the general contractor wants a financing confirmation for the entire construction sum.

Our financing bank has received an official document from our house bank that lists the deployed cash assets, i.e., the liquid funds. Thus, it has approved our calculation and also handed over some kind of document to the general contractor. Or rather to us, which we could pass on.

We would like to finance the last installments for the house construction from equity.

We thought we would pay the last installments from equity so that we enter the repayment phase earlier + we might possibly have some leverage at the handover if there are defects.

Financing banks hardly agree to that. Yes, you can withhold some amount, especially for paving work, etc., but in principle, it is expected that the main part of the equity capital is used up first before the borrowed capital is paid out.

... in principle, it is expected that the main part of the equity is used up first before the debt is paid out.

Well, our bank doesn't care at all. Are there any regulations on this?!

Also, our bank doesn't care at all. Are there any regulations?!

Every bank can decide for itself, but it is quite unusual if they advance the financing first and the consumer/builder possibly spends their own cash funds on other things. Then you end up with a half-financed house and that's it. Maybe equity plays no major role in your financing compared to the loan? For example, with us the ratio was 1/3 to 2/3.

Maybe equity does not play a major role in your financing compared to the loan? For us, for example, the ratio was 1/3 to 2/3.

We have 1/3 equity. And the general contractor also did not want any proof and is already happily building. Should I be worried? :oops: (I don't want to hijack the thread now either – just curious)