Is a construction financing advisor present?

It is not about calculating it cheaper, but only about explaining it to Hagiman2000. I do not want to get too far out on a limb with any interpretations, but at the moment it reads to me as if he is, among other things, wondering why he should shell out 15,000 for the "Außenanlage" when he wants to sow only about 2-3 buckets of grass seed around at most.

No no. Apparently, I did not understand the system of the muscle mortgage. I thought you add amount X to the equity and amount X to the construction costs. But I would have access to the amount X of the construction costs in the form of payments which I prove with invoices.

However, it seems that with the muscle mortgage I only change the percentage loan-to-value ratio in my favor. Instead of putting 30,000 equity into the construction financing and holding back 15 for land, walls, and outdoor facilities, the construction financier now puts in 45,000 equity and, in return, 15,000 for outdoor facilities (aka materials) in the construction costs. I then receive money paid out from these 15,000.

So two levers were applied here directly to improve the percentage loan-to-value ratio and not just one (and that probably confused me).

Did I understand that correctly (because the first calculation was house costs + auxiliary costs + incidental purchase costs - equity (30,000), so completely without outdoor facilities and own contribution)?

Hello,

according to my understanding, the building has manufacturing costs of X K€. The manufacturing costs are the sum of external capital (loan), liquid equity capital invested in the construction, and the value of in-house services. In-house services are valued similarly to the labor costs of a craftsman and are therefore added to the manufacturing costs. (muscle share) The loan-to-value ratio is then the quotient of external capital and manufacturing costs multiplied by 100%. In addition, acquisition incidental costs must be paid from the available equity capital.

Withholding equity capital for floors, painting materials, etc. does not change the fact that they are part of the manufacturing costs. A bank usually wants a coherent cost breakdown for the entire construction of the building.

The equity capital to be contributed to the overall financing for the construction of a finished building must be used prior to the external capital from the bank.

This results in a shift regarding what the equity capital is spent on compared to what you originally planned. However, this does not matter in terms of the total cost approach to construction. Then the wallpapers will simply be paid by the bank.

This is how I would explain it now in my own words as a non-banker.

Regards Sven by Tapatalk

Hello,

according to my understanding, the building has production costs of X thousand euros. The production costs are the sum of external capital (loan), liquid equity funds that are invested in the construction, and the value of the labor services provided by the owner. Owner labor is considered similarly to the wage costs of a craftsman with a value and thus added to the production costs. (muscle contribution) The loan-to-value ratio is then the quotient of external capital and production costs multiplied by 100%. Additionally, acquisition incidental costs must be paid from the available equity capital.

Withholding equity funds for floors, painting materials, etc., does not change the fact that they count towards the production costs. A bank usually wants a consistent cost breakdown for the entire construction of the building.

The equity capital to be invested in the overall financing to produce a finished building must be used preferentially over the bank’s external capital.

This leads to a shift in what the equity funds are spent on compared to what you originally planned. However, this does not matter in the total cost approach to production. Then the wallpaper will simply be paid for by the bank.

That’s how I would explain it now in my own words as a non-banker.

Best regards, Sven by Tapatalk

Jo!

I just came from another construction financer and have nothing but question marks in my head.

He told me the following (I'll leave out the ancillary construction costs as they have nothing to do with the question):

293,800€ house price
20,100€ special requests
15,000€ personal work
------------------------------
328,900€ total

Equity:

45,000€ in cash
15,000€ personal work
------------------------------
Total 60,000€

Another construction financer calculated it as follows:

293,800€ house price
20,100€ special requests
15,000€ personal work
15,000€ materials
------------------------------
343,900€ total

Equity:

45,000€ in cash
15,000€ personal work
------------------------------
Total 60,000€

The second construction financer said I can't count the 15,000 personal work in construction costs; they are simply offset one-to-one (I had already written this here before), and therefore the material costs must be included.

I asked today’s construction financer why he didn’t include the 15,000 for materials. He said let's assume the following case:

The trades cost 30,000€, of which 15,000€ are labor costs and 15,000€ (of course it is rarely 50%/50%, but let's calculate it this way to keep it simple).

The bank has to pay for the materials anyway, regardless of whether a craft business performs the work or not. What is not incurred are the labor costs, so these are deducted and credited to the equity as "muscle mortgage".

Simply put, who is right?

Don't make it so complicated: As Nordanney already wrote: The cabin costs "tutti kompletti" 368k (including incidental costs). You pay that, not the bank!

It's now just about how much the bank has to lend you. You have 45k cash and contribute 15,000 euros of labor. Therefore, the bank has to finance 308,000 (including incidental costs).

As soon as you sign with the notary, 338k is due. Your 45k cash goes in there and another 293k from the bank. You can then access the remaining 15,000 bank loan once you start painting, laying the floor, and working on the outdoor area.
In the end, the house contains: 338k (price + incidental costs) + 15k (materials) + 15k (labor provided by yourself) = 368k total price

You have 45k cash and 15k as "own contribution." So you need loans amounting to 308,000 euros! Period.