Financing Offer - Construction Financing in Two Parts

  • Erstellt am 2018-05-06 11:29:34

Immo456

2018-05-06 11:29:34
  • #1
Hello everyone,

we are going to build a house, which is estimated to have total costs of 381 T€ (notary, property transfer tax already included). Of this, we bring equity of 15 T€ and "muscle mortgage" of 29 T€. The financing requirement is then 337 T€, i.e. about 89%.

Together we earn 4,400 T€/monthly, employed, special expenses are loans of 530 €/monthly until mid-2019, no children.

We have compared all financing options, but they are all still from February 2018, a current offer from April/May 2018 would only be this one, because we had some difficulties and now have to decide quite quickly.

Conditions are repayment 2% (about 1200 €/monthly), special repayment 5%, no right to change repayment, 20 years fixed interest rate, must take out a term life insurance (RLV) with their partner for at least one person approx. 11 €/monthly (market comparison showed about 9 €/monthly). Max. contribution approx. 17 €. For my partner we take out insurance elsewhere..

Construction financing consists of two parts, 200 T€ and 137 T€.

We get 200 T€ for
2.28% nominal
2.44% effective (here the RLV was included)
6 months interest-free provision period

We get 137 T€ for
2.35% nominal
2.38% effective
12 months interest-free provision period

I think the offer is okay and would be similar elsewhere. Only the required RLV that we have to take out with them bothers me... Does anyone have experience with such conditions?

What is your opinion? Do you agree regarding the interest rate considering the conditions, and can one overlook the RLV or would you say we should keep looking, since even at 89% financing something better could be found?

I am grateful for any answer and opinion!
 

Alex85

2018-05-06 12:04:03
  • #2
What are you doing in EL if these 29T€ costs are supposed to save labor?
That is about 580 craftsman hours, or 73 working days. As a layperson, of course, it takes longer than a professional.

With such high EL, I would consider the interest-free period because your construction time will be longer than normal. Plan for double rent and additional financing costs.
What buffer cash do you have on hand? The 15T€ equity in the financing just covers the incidental purchase costs, and without the EL it would be 100% financing.
How will kitchen, furniture, upgrades, lamps be paid for? Are the exterior facilities included in the offer? Is the offer really complete?

I think in your constellation you have to take what you can get. The high EL will not be recognized by everyone like that, there is a clear lack of equity (cash!).
 

PhiTh

2018-05-08 12:38:39
  • #3
I think the interest rates are okay for your situation.

How realistic the total price for your house + land is remains unclear to us. I find it to be an extremely tightly calculated financing. In my opinion, you would have to finance the entire 380K€. Believe me, your equity will vaporize for unforeseen expenses, and the amount of personal contribution is incredibly difficult to manage... For example, you mention notary fees included. Are these the notary fees for the purchase of the land or for the registration of the land charge? The latter are included in the effective interest rate but have to be paid in one go.

The interest-free provision period is only really feasible with a prefabricated house; with some flooring, wallpaper, and paint, however, the personal contribution at that level is absolutely unrealistic. Everyone advised us to plan with 10% more :-) In the end, it even became more expensive. Don’t be mad at me, but your plan is clearly too optimistic...
 

HilfeHilfe

2018-05-09 07:38:42
  • #4
Somehow this thread passed me by. I agree with the previous speakers. In your case, take . Nothing better will come. Are you aware that after 20 years there will be a high remaining debt? And whether a RLV costs 9 or 11€ per month doesn’t make much difference. Can it be canceled if necessary or is there a clause in it? What kind of difficulties are you talking about?
 

Immo456

2018-05-13 15:28:19
  • #5
Hello everyone,

thank you for your responses. We still managed to quickly compare offers with an intermediary, and although there was one that would have been better, it wasn’t enough to make the stress worthwhile. We’d rather save our nerves for the construction period…

The 2 euros are of course not worth mentioning, but if the insurance were to significantly increase its premiums compared to its competitors, it would look different again. The clause contains standardized text (cancellation at the end of the period), but our contact at the bank says that we have to stay there for the entire loan term... Anyway, it’s no longer important now. If the premium is greatly increased, we will contact the insurance company directly.
 

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