Financing of the property: Does the entire financing need to be secured?

Good evening dear builders.

We have reached an agreement with the owners and will purchase the property for €51,000.

My question: Does the entire construction financing of approximately €230,000 need to be in place to buy the property, or is it better to first take out and repay financing only for the €51,000 for the property, then calmly choose a house provider and afterwards arrange new financing?

With an overall financing of €230,000, must the full interest+repayment be paid immediately or only for the €54,500 (property transfer tax, notary and court fees)?

Best regards

Good morning.. I am currently also planning, searching, etc. Regarding your financing question, I can't say anything. I am not very familiar with that.. Will there be additional equity to the 230,000€? Or is the entire project to be financed with that?

Hello Xtreme 1000

Equity is available, approximately 15,000. As well as 85,000 € from Landesbank NRW. The financing would work. My question is only whether it is better to take the 230,000,- € construction financing immediately or first only finalize the 54,500 € financing and then calmly decide on a house provider and then arrange the total financing.

Best regards

Hmm, okay. I just find the 230,000 + possibly 15,000 if that is for the entire project a bit tight.. Because of the land. Can't you just reserve it first, calmly plan a house, and then handle both together. Otherwise, just talk to the financing bank. It will definitely have to be the same bank because of the land register issue!!

I cannot reserve it, I was only able to print the price, then we can make the notary appointment at short notice and transfer the money by 30.06.2012, which is actually doable.

Only I am then afraid that I will have to service the loan and at the same time still pay rent until the entire construction project is completed.

Best regards

Hello,

I would advise you to finance everything directly. For a plot of land, your first loan is entered into the land charge. However, the bank also wants the same for the second loan. Then they are no longer in first place in the land charge. This means for you that you will have a higher interest rate, as the bank wants to safeguard against a possible insolvency on your part and secure their share in advance.

If you don't have a company for the house construction yet, you need to hurry now ;)