How important is the construction contract for banks?

Hello everyone,

next week I will most likely have the notary appointment for the property. I have already submitted a construction contract to the bank for the financing, but I have not signed it yet.

Actually, I plan to sign it only after the notary appointment, after the sampling, and once the floor plans are finalized.

If something goes wrong and I have to look for another house builder, how important is that for the bank as long as I stay within the agreed budget?

Could it happen that my property financing is at risk as long as I don't have a construction contract? Or should I rather do it separately: first the property financing and then the house?

Thank you very much
insgruene

Hello,

…how important is that for the bank as long as I stay within the agreed budget?

You should approach it differently, i.e., agree with your financing bank on the maximum amount you can finance – not tied to a specific construction project. This way, you are not only free to choose your building partner – as long as you stay within the limits of your financing commitment – but also free to decide how much money you want to spend. And don’t forget to have your preferred partner checked by your house bank ;)

Kind regards

Thank you very much, I will do that. My problem is just that I have not yet found a company whose contract seems okay to me. For example, Schwörerhaus requires a financing confirmation from the bank, which you say is an assignment of claims. Town & Country has clauses like the admissibility of acceptance through implied conduct or payment at the contractor’s reasonable discretion. And everyone says that the standard contract cannot be changed and thousands of customers have no problem with it.

I am slowly getting really a bit desperate.

My bank does not want to check that. Wrong bank? But it is not my main bank, rather the one through which I finance.

Hello,

... for example, Schwörerhaus requires a financing confirmation from the bank, which you say is an assignment of claims.

That is nonsense :mad:

A financing confirmation states – as the word itself implies – a confirmation from the financing bank that the capital for the house construction is secured and may only be used for this purpose. You do not assign any sum "X" and retain control at all times over when the funds are released.

A financing confirmation can be formulated, for example, as follows:

We confirm that, subject to the full approval of the public funds specified in the
financing plan, the total financing of the project in the amount of ........................... euros is secured. In particular, we have satisfied ourselves that the equity specified in the application in the amount of ........................... euros is available or can be raised.
We undertake to cover all necessary interim financing and
to provide the required loans for financing the operating resources. We confirm that the above information has been provided with due bank diligence.

Kind regards

Ok, then I misunderstood that in your guide. I am wondering, however, why my bank does not want to conduct a verification?