Financing request - How many documents are normal?

Hello,

we have initiated a financing request which ended with the bank refusing to provide financing unless everything comes from one company! We were shocked! We only want to contract out the foundation slab ourselves (timber frame house in prefabricated construction). We simply save a lot of money if we hire a regional company instead of the house building company hiring a contractor.

So we contacted a second bank, where we actually felt much better taken care of. But now the same discussion unfortunately begins: If you contract something yourself, that is a big risk for the bank that the house will not be completed. Why don’t you have an architect who prepares a cost plan? Who assures us that you won’t need additional financing? Please provide third-party evidence for every item (e.g. how we arrive at the estimated (!) amount for the subsequent selection).

Are there increased requirements since the Corona crisis?

We don’t know if this is the normal process we have to fight through because this is how it is everywhere or if we should better cancel everything and start over?

We would be grateful for advice and will think it over a few more nights before submitting individual prices for the umpteenth time.

Just a thought, without personal current experience. But maybe your creditworthiness isn’t that great or are you financing right at the edge of what’s possible?

I bought used 5 years ago and a complete renovation had to be done. For the loan application, I only attached the documents for the house and the following list:

Renovation cost estimate Window and balcony doors upstairs €20,000 Offer company XXX Basement windows replacement €400 Offer company XXX House painting €3,000 Own work (scaffold + paint) Roof insulation €4,000 Own work, estimated building materials Water and sewage pipes €7,200 Offer company XXX New electrical wiring both apartments €15,000 Estimated by electrician Front door €2,500 Offer company XXX Terrace door €2,000 Offer company XXX Adjust room layout and convert barrier-free €1,000 Own work New bathroom upstairs €2,500 Own work New bathroom downstairs €2,500 Own work New heating system €8,000 Offer company XXX Replace radiators €3,000 Own work Insulate radiator niches €500 Own work New floors both apartments €6,000 Own work Whitewashing all rooms €1,500 Own work Renovate balcony €500 Own work Plastering work €400 Own work Buffer for unforeseen €10,000 Total €90,000

(XXX was a locally known company)

The offers were never requested. Only larger invoices were requested upon disbursement.

But as I said, that was 5 years ago... It was also my first property at the time, so I had no experience yet.

Regards Specki

The criteria regarding the risk of default were indeed partially adjusted again during Corona. I have not heard about self-awarding yet, maybe knows more?

Who was contacted? A regional bank? Your primary bank? Or a generic bank? How are things otherwise regarding the income and the complete data? Walk us through the numbers.

My first guess would be that maybe something in your breakdown is not correct or seems implausible?

Otherwise, my experiences are limited, as we actually received a breakdown from our construction company that included all costs (estimated). Does that make a difference? We also only estimated, partly based on the expertise of our construction company's advisor.
Which was worth its weight in gold, by the way.

If you simply submit your estimate, the bank will doubt it. If you have a stamp from the architect/contractor put on it beforehand, the world looks completely different, even if the numbers are identical. True Story.