House construction / house purchase planned, evaluation of financing plan

So, I'm speaking up again after some time has passed.

In February, we saw that a new development area (by a private investor) was being designated in our town. Upon inquiry, we were informed that there are more than 10 times as many interested parties as there are plots...
Then we saw on a major real estate portal that several semi-detached houses as prefabricated houses are to be built in this new development area. Through this channel, we then acquired a plot (with the condition that we build with the prefabricated house provider). I then calculated the whole thing and come to an amount of around 550,000 euros (just under 400 sqm plot, 130 sqm living space, move-in ready including floors and painting work). The price already includes all purchase and incidental construction costs (even with a buffer upwards) as well as a garage, driveway, outdoor facilities. Construction would start at the earliest at the end of 2021, move-in sometime in 2022. A financial broker and also my house bank have already given the green light regarding financing. The interest rates of the financial broker's best offer and my house bank's offer are almost identical. On instinct, I would prefer to go to the house bank.

However, there is still one point that gives me a headache. Understandably, the banks want to have all documents about the house and the plot before a final credit approval. However, the purchase price for the plot is significantly above the BORIS value, but corresponds to the actual prices paid in the area. I have now heard from several sides that the bank can then refuse financing. Others say that since the bank evaluates the entire project (plot including house), it will give the green light. The investor argues that he has to develop the whole area and then hand over the roads to the city afterward. And we benefit from this because no further development or road costs will arise for us.

What are the chances that the bank will approve the project despite the higher price per sqm? That would really be the last hurdle we would have to overcome :)

How much equity are you contributing?

How much equity are you bringing in?

As already mentioned in the thread, unfortunately we are not bringing in any equity.

[*]Balance approx. €2200 - €2500 [*]Of which total cold rent and dispensable savings contributions (e.g. savings rate for house) approx. €3000 - €3200

It was two months ago, so that should already be about 5 equity :rolleyes:.

Others say that since the bank evaluates the entire project (plot including house), it will give the green light. The investor argues that he has to develop the entire area and afterwards hand the roads over to the city. And therefore we have the advantage that no further development or road costs will arise for us.

Of course the bank evaluates the entire package and weighs the risk. What reduces the risk for you? The missing equity? The plot which is above average expensive and thus the bank pays €550K instead of €500K? But whether you get the green light can only be told to you by your advisor who has all the details. Basically, I think that the higher price deviating from the standard land value generally does not pose a problem. Provided the other conditions are right. For us, the price per sqm was also above the reference value.

It was two months ago, then it should already be about 5 times the equity :rolleyes:.

Of course, the bank evaluates the whole package and weighs the risk. What reduces the risk for you? The lack of equity? The plot of land, which is above average expensive and therefore the bank pays 550K instead of 500k?

But whether you get the green light can only be told by your advisor, who has all the details.

Basically, I think that the higher price deviating from the standard land value generally does not pose any problems. Provided the other framework conditions are right. For us, the price per square meter was also above the reference value.

Ok thanks for your answer :) I would not want to call 5000 euros equity. The money we have saved until the expected move-in will be spent on the kitchen, furniture, little things, etc. Therefore, the full financing.

Exactly, the bank takes a certain risk because there is no equity (which is "punished" by a not-so-good interest rate).

Balance approx. €2200 - €2500

You should have already saved €7500 by now. How come there is still nothing???

I come to a total of around €550,000

No equity means no incidental purchase costs and no kitchen!

And we therefore have the advantage that no further development or road costs will be incurred by us.

Are you sure about that?

Others say,

What others say... submit the documents to the bank, then you'll know.