Financing volume as detailed planning to the bank / lump sum?

Hello everyone,

I have a general question about how the financing process works.
We are building a house for about 315,000 EUR without additional costs in the selection phase. However, many things are still missing at that price: incidental costs, floor coverings in 60% of the house, garage, paving work, terrace... So I have set a financing volume of 370,000 EUR. Of that, 100,000 EUR is with the new KFW 153 program and 270,000 EUR through the bank.

In the first bank meeting, I gathered that you cannot simply accept the additional costs up to 370,000 EUR as a lump sum, but they want a detailed cost breakdown for all activities, showing what the money will be used for.

Is that normal? What is the best way to proceed? Many of the costs are not clear yet. Today we still don’t know which parquet will be installed and whether we will lay it ourselves or have it done. All that makes a difference. Also, I don’t want to calculate the entire garage with materials now. How does the drawdown of partial amounts work then? Suppose I leave the garage aside for 3 more years. Can I still draw the planned 20,000 EUR, for example, for the terrace and then build the garage later with an unused special repayment???

As you see, many detailed questions.
Thanks in advance and best regards, Redsonic

Yes, that is normal, you would do the same if someone asked you whether you should lend them 370,000 EUR for a house, right?

Make a table, write down what comes in addition to the house costs and write an estimated price next to it. The bank will tell you if that is okay or not. And if you write a small comment for each position, that is already more than most people do.

Do you want money from the bank, or money from you? So just put in some effort, sometimes even small things help in negotiating the conditions.

Example:
Parquet: 150sqm at 60 Euro (material + labor) = 9,000 Euro
Garage: 2x 6x3 + extension = 18,000 Euro
etc...

You always start with the costs including labor. If it then becomes cheaper because you do part of it yourself... be happy. The saved money will have to be used elsewhere, because when you have everything finished, you add another 10% on top of all costs.

In the end, no one cares if the parquet cost 7 and the garage 20. However, leaving out the garage and then spending 27 on the parquet is something that most banks do not really like.

Yes, of course that is understandable. I just wanted to know if it is customary. It is also not the case that I don't already have a long Excel sheet with all the costs. That is available. It was more about the level of detail and the costing approach: that is, including labor costs and the items rather lump-sum. Then it is also clear to me. It could have been that, for the garage, every screw and every door has to be calculated individually and the costs obtained for it.

Thank you.

But yes, that is common. You will be surprised at all the receipts and documents you have to submit before any financing request is even made. We are doing that right now as well. The carport is already precisely planned and we have a quote, the costs are included in the financing. We have roughly calculated the outdoor facilities and these are included, the incidental construction costs for a house our size are estimated at various banks to be €35,000 .... etc. a lot adds up and that's how we feel, it's also good to know where the journey is heading. And as precisely as possible. Because the more I research and can specify now, the fewer surprises I will experience.

Suppose I leave the garage aside for another 3 years. Can I then still, for example, use the planned 20,000 EUR for the terrace and build the garage later from an unused special repayment???

No, that’s not possible. You offer the bank a house with a garage as collateral – so you have to deliver exactly that.

My predecessors have already written enough about the rest. Roughly plan your costs/special requests. If it turns out cheaper, that’s good. If it becomes more expensive, hopefully you have a buffer to cover the additional costs.

The outdoor facilities were included in a lump sum of 15,000€ for us, for example. Anything above that would have had to be itemized in detail or supported with quotes.