How to use equity

Hello everyone,

A general question.
If you contribute around 30% equity when building a house with an architect (of the total construction costs), how is it best used?
Or do the banks usually specify that for you?

Thank you very much for any answers.

Most of the time, one buys the land with it and pays the first bills; the banks usually want to see that used as a priority. One should keep some money in reserve to be able to pay for additional costs and extras as well as furnishing, so that one does not have to go to the bank for every hardware store bill or other expenses.

The property would already be available. So that means I don't give the bank the actual amount of equity and prefer to pay for the kitchen and other things from the withheld amount?

Exactly! The kitchen, furniture and other items are not financed anyway. You only state the actual amount of equity you want to use, not the amount you have. P.S. paid land is also equity

Wait and see when you finalize the financing and when you actually receive the money.

We had already spent 25,000 EUR before the first excavator was on site to start the earthworks.

There are plenty of opportunities to invest your equity.

If there is enough equity and land available, banks are usually quite relaxed about the use of the money. But Saruss is right, in most cases the majority of the equity is used first.

A bit of reserve also makes it more comfortable. So we were simply able to collect invoices and had the credit transferred to us in 4 steps. Sometimes you can also save money with craftsmen on extras, immediate payment is appreciated.