Follow-up financing experiences. What has this brought upon you?

  • Erstellt am 2018-04-18 10:43:46

Tolentino

2021-10-25 14:02:19
  • #1
I know someone who has saved quite a lot of money over time and suffers from indecisiveness and therefore has not yet invested in real estate themselves. So I just approached them and made a private loan agreement. Private in the sense of between private individuals.
 

Schipa88

2021-10-27 08:04:08
  • #2

Does he still have too much money?? :cool:
 

Georgian2019

2021-10-28 15:14:02
  • #3
We did not have to provide any additional financing. Despite having equity, we calculated from the start with 100% financing. Although that is not entirely true, as the land was already paid with equity. The calculated construction costs including outdoor facilities were then financed at 100% (including €50,000 KfW subordinated at 1.45% at that time and 80% loan-to-value with a 30-year term and fixed interest rate at 1.7% beginning of 2019). We had complete equity as a buffer. Of course, everything ended up being about 12% more expensive than planned (partly due to higher costs or higher specifications). However, we were able to comfortably finance this from equity or ongoing income. Our loan interest rates are below the inflation rate. Therefore, a 0.1-0.4 percentage point better interest rate did not matter for a better loan-to-value ratio.

I manage construction financing every day and my personal conclusion is: people build too large (too expensive) with then too little equity or plan all their equity into the financing and then calculate too tightly. Better to build 20-30 sqm smaller, keep more equity in reserve. That saves from having to provide additional financing and years of neglected gardens and outdoor facilities.
 

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