Impacts on loan when equity is in property

Hello everyone,
we also want to build. For that, we need to take out a loan. We are also bringing equity, so a loan is basically not a problem.
Would it be conceivable to approach the whole thing slowly and first buy the [Grundstück] with the equity and then calmly plan the house in a few months and then build it (for which you would then need the loan)?
Or does the bank then say that you can no longer get the loan because you no longer have any equity (since it is tied up in the [Grundstück])?
Does anyone happen to know?
Thanks.

Hello,

this option even makes sense.
The plot then counts as contributed equity.
Total project = plot + house costs
paid plot is X % equity ratio of the total project (roughly speaking)

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Additional info - This option makes sense because:
If you were to take out a loan for the plot purchase, it could be that the lending bank registers itself in the land register. Thus, you would then be limited in your choice of bank for the house construction, as other banks would have to take the second rank = worse conditions.
You would therefore be forced to complete the financing through the bank that also financed your plot. This bank could possibly offer you slightly worse conditions (since you are forced to finance with them).

Additional info to the additional info - Countermeasure (before someone else raises a finger and says BUT):
This could possibly be countered with a variable loan for the plot. This loan can then be easily redeemed by the house-financing bank, which itself can then take the first rank on the land charge.

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However, the additional part does not have to concern you further, since you can buy your plot from your equity. You should however make sure not to completely exhaust yourself, because it is also sensible to still have a few coins in cash for the house construction.

Hello lynx42,

nice that you found this forum. Your topic can be felt reading in some thread about financing every day. You can also read this info and much more interesting stuff by searching and surfing in the HBF.
Have fun with it wishes
Yvonne

Thank you very much for the quick information. I will try to put more effort into the search in the future. I guess I will probably check in here more often.

Hello, yes that makes sense. However, I want to give you two more points to consider. To avoid any nasty surprises, I would have a maximum loan amount calculated that you would get. (not that the loan is missing) and consider whether there is still equity available when the construction starts because some equity is needed for certain work :-) Flat-rate payments without proof could be more difficult with the bank. Even if you argue that the money is tied up in the property....

I agree: I wouldn't put all the equity into the property. When you start, you will need additional liquidity from equity (special requests, furniture, garden, etc.) and you can't always add that later/additionally through the loan.