Financing property purchase and modernization

2019-06-26 11:38:09

1a. Finance everything together (purchase + renovation)
1b. Buy the house with equity and then set up financing
2. Buy the house partly with equity and only after the purchase start the renovation including financing for the renovation
3. Approach house purchase and renovation with a loan and partial equity, retaining equity for the renovation

This gives you the options in the most financially advantageous order. Any questions?

Thank you for the summary, which leaves no questions unanswered

2019-06-26 14:20:35

Where is the difference between the loans you mentioned? Exactly, there is none in your configuration. Besides, the bank always wants to see the equity contribution first and only then disburses its loan.

This "always" is not correct. We use our equity only at the end. Or rather, we have used it and get it paid out again shortly before the start of the period subject to commitment interest, in order to save on this. And then we use it again at the end. Or shortly before the end, to avoid double burden. I am digressing. In any case, this works under certain circumstances.

2019-06-26 14:42:36

Or rather, have invested it

Exactly - you also invested it at the beginning (or had to invest it) because you have closed financing. An equity release is then possible because a) you have already shown the investment and the bank has also calculated with it and b) apparently your cost planning for debt/equity fits.
It looks quite different with the OP.

2019-06-26 15:25:47

So we can also use the equity whenever we want. So far we have done it in a way that we transferred smaller amounts (notary, for example) ourselves and then received the money from the loan transferred to our account, and for other things sometimes also that we sent the invoice by email to the bank and it was then paid from the loan. This works without problems.

2019-06-26 19:04:52

No, we didn’t have to use anything at all, we could just have drawn down the loan directly. But that would have been stupid, then we would have paid interest on borrowed money and had the same amount lying around somewhere interest-free or practically interest-free. And I’m not that loaded that I would do that.

2019-06-26 19:08:12

Apparently your cost planning regarding debt / equity fits.
It's quite different with the OP.

The OP has roundabout 90k of an estimated 200k. What exactly doesn't fit with the equity/debt? Our ratio is nowhere near as good...
And I haven't even taken the friend price into account.

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