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

Thanks,:cool: that means now to grit your teeth and step up the pace even more. Well, what one doesn’t do for the family.

Hello,

I want to do exactly as you describe: I have a plot of land in sight. It should cost around 40,000. Of that, I will put 20,000 in cash on the table and would like to finance the other 20,000. Next year, I want to start building the house at some point. Possibly only in the fall, so that the shell can settle nicely over the winter. I will arrange the financing so that I can make substantial extra payments and that by then, ideally, half of the 20k is already paid off. The only disadvantage is the double land charge entry, right?! But that allows me to calmly search for the right house.

Are there any comments on this? I am also just at the beginning of the whole planning and I welcome any encouragement or criticism :-)

Best regards

Chris.

Oh dear,

Guys, don’t get me wrong, but a plot of land costing 50k should really be paid for with equity, or else financed and paid off before you even think about building. And don’t rush anything when building, you want to live there your whole life, so a few months won’t make much difference.
That might sound like a know-it-all attitude, but it is what it is.
Take it easy with the excessive pace for now, otherwise you’ll end up (with your family) sitting on a mountain of debt!
And that one post about rent and financing.... well how else? If that doesn’t work, how is financing ever supposed to work?

Oh dear,

People, don’t get me wrong, but you should definitely pay for a plot of land costing 50k out of equity, or else finance it and pay it off before you even think about building. And don’t rush anything when building, you want to live there your whole life, so a few months don’t matter. That may sound preachy, but it’s true. Stop with the excessive speed for now, otherwise you’ll end up (with your family) sitting on a mountain of debt! And that one post about rent and financing... well, how else? If that doesn’t even work, how should financing ever work?

That’s exactly how I see it too. Please don’t try to sugarcoat anything at all costs. Reality looks different. Building a house for 230,000 or 250,000 euros including the land is already very ambitious. Just think about the incidental building costs alone and everything else that comes with it. There might also be some problems during the construction phase and then the whole thing goes south. What use is a nice home if you can’t sleep peacefully afterwards?

Regards

So about the property financing. I bought a plot of land last year and will only build next year. I also financed the plot, but I have no fixed term on the loan. That means I can cancel the loan monthly. The advantage is that next year I can do the entire financing and pay off the current loan. This way, I also don't have the problem with the priority order in the land register and can freely choose the bank. :) If you don't do this, you can almost only get building financing from the bank that is already first in the land register for the other loan. And then the bank can dictate the interest rate to you ;) So if separate and the plot in advance, then don't fix the loan!

So about the land financing. I bought a piece of land last year and will only build next year. I also financed the land but I have no fixed term on the loan. That means I can cancel the loan monthly. The advantage is that next year I will do the overall financing and can pay off the current loan. This way I also don’t have the problem with the priority ranking in the land register and can freely choose the bank. :) If you don’t do that, you can almost only do the building financing with the bank that is already first in the land register for the other loan. And then the bank can dictate the interest rate to you ;) So if separate and land in advance, then don’t fix the loan!

Thank you very much for the good advice.

It looks like we have finally found the right developer for us and will probably start building this year.