Financing Power of Attorney for Property Purchase

Hello,

we are buying a plot of land and paying for it with our own capital. Now the question arises whether we need a financing authorization / if it should be included in the contract.

As far as I understand, the financing authorization is only necessary if the change of ownership in the land register has not yet taken place, but the bank is already supposed to provide the loan. That means after the change of ownership, a financing authorization is no longer required, as the bank recognizes the property as collateral?

Does the bank (usually) require an entry in the land register when I take out the construction loan for the house and contribute the land as equity (as collateral)?

First. Equity does not require financing, therefore no power of attorney. Second. If you don’t pay for the house in cash later but finance it, the bank will of course want to be entered in the land register, how else do you want to secure the loan? Karsten

Hello Karsten,

thank you for your answer.

What would be the best approach if I want to save the costs for a second notary appointment in order to have the land charge registered for the bank? To have the land charge registered already now when purchasing the property?

Then you pay it now. You are paying the fee for the act. Registration. At some point, the €150.00 is due. And how do you know now how many thousands the bank wants to register? That depends on the amount of the loan you take.

It doesn't matter whether the notary bends over backwards for the mortgage now or later. The costs will be 99.9% 100% the same.

The only thing you save are your travel costs as well as double parking fees.

I would wait with the land registration until you know how much actually needs to be registered.

The most expensive thing is if you register a flat 300 now, but in the end it has to be 330.

Then you have made a bad deal.

The notary fees are the same, whether registered now or later. In principle, any notary can do this; you don’t have to go to the same one. You also cannot register a land charge now because you don’t know in whose favor this should happen. The bank will send the notary documents with partly predetermined wording that must be entered. Remember that the transfer of ownership (Auflassung) is usually only initiated once the purchase price has been paid and possession has changed. What I mean is that this is not triggered immediately after you sign the contract. The processing time at the land registry office is a bit of a lottery. There have been users here who were not registered as owners even a year after purchase. For us, it took about 2 months. So if you plan to buy now and, for example, add financing for the house in 6 months, I wouldn’t bet my life that this will work due to lack of power of attorney. Does the financing power of attorney hurt anyone? I think that is standard.