First installment payment - proof of total financing secured

Hello everyone,

we have a completed contract from ING, as a condition of the disbursement it is noted:

- Until the first disbursement, you must provide proof to the lender that the total financing of your project is secured.

Is this a standard text or is there more behind it?

Thank you very much

Is that a standard text or is there more behind it?

Standard (at all banks in one form or another). The bank wants to be sure that the overall financing is secured and that you don't come after three months saying you need more money. One could also have written: "Proof of equity of €XYZ thousand and proof of the ability to provide own contribution in the amount of €XYZ thousand" or similar. ==> So that the total acquisition costs are covered by the bank loan and other means (equity / family loan / own contribution or similar).

Thank you very much - but how am I supposed to provide this proof? I am just at the very beginning (so to speak at 0.01% construction progress :-) ) and the bank wants a confirmation for the completion when everything is finished.

Thank you very much - but how am I supposed to provide this proof? I am just at the very beginning (so to speak at 0.01% construction progress :-) ) and the bank wants a confirmation for the completion when everything is finished.

No. The bank only wants proof that your cost calculation is covered by debt capital and equity capital. And of course, the bank wants to know that at the beginning.
As a bank, I do not want to start construction without knowing that the customer actually has equity capital.

So:
Land + ancillary costs: € 100,000
Construction costs: € 500,000
Additional construction costs: € 50,000
Outdoor facilities and garage: € 50,000
Total costs: € 700,000

Financing ING: € 500,000
Equity capital: € 170,000
Own contribution: € 30,000
==> That is the situation on the day of your planning.

The bank now wants to see the PROOF that you actually have equity capital of € 170,000 and are not just rambling about funds that maybe your uncle from Mongolia might possibly provide.
And maybe a statement from the architect (or from yourself) about the own contribution you provide. For example, painting and laying floors = saved labor costs € 30,000.

It’s actually quite simple if you provide exactly what you offered ING in the application. Everyone who takes out real estate financing has to do this.

One could also have written: "Proof of equity capital of € XYZ and proof of the possibility to provide own contribution in the amount of € XYZ" or similar.

I had actually already formulated it that way, that’s what I meant.