Is follow-up financing common only with the architect?

Hello,


we bought a house in 2013, which was partially renovated at that time. The purchase price was €335,000, of which we financed €290,000 through the bank. Additional costs and another €70,000 for further renovation came from our own funds. By now we are almost finished, but we have no money left. There were simply unforeseen expenses that had nothing to do with the house. And we did not have the outdoor area on the plan, which of course still involves quite a few costs.

What is still open now is balcony renovation (insulation, tiles, railing), the outdoor area, and some interior finishing, underfloor heating and tiles for half the house, guest WC and the main bathroom (a small guest bathroom is already there).

We went to the bank in September and asked how things look.

Basically no problem, income is solid, but the bank only finances up to an 80% loan-to-value limit. That limit is then €268,000 and we still owe €246,000 (approx., I don’t have the exact figure at hand anymore). So a possible loan volume of €24,000, but they want us to list all the work and get corresponding quotes, then it could be counted as increasing the value.

That the house is now worth more than the purchase price, since it is now a passive house with energy surplus, doesn’t matter, the bank only cares about the purchase price. An independent appraisal would not be accepted either.
Since September, we have carefully listed everything, for most work we have gotten offers or calculated material costs for self-construction.
Total sum, around €85,000, with a buffer we wanted €100,000, in the first conversation it was said it would be no problem if it's too much, then it could be paid off later with a special repayment.

So this week, with all the material to the bank, the caseworker looked at it, height would be no problem, income is there, blah blah blah, but he can’t accept the cost breakdown as is, it would have to be done by an architect.
So we left again, half a day’s vacation was really worth it.

I don’t want to badmouth the architect’s work, but that really is money down the drain.

I have corresponding drawings of the outdoor area and obtained 3 quotes from different firms, that is the largest single item at €36,000, the same amount for the terrace. All the tiles and material for the underfloor heating are calculated, the labor is generously estimated with €50/m² etc.

This morning I made some calls, unfortunately the architects are not very forthcoming, but I have to reckon with about €8,000.
Honestly, I don’t see it, then it will take 10 years until everything is finished after all. And I will pay out of my regular income.
Although I can understand the architect, clearly no one wants to sign under my list.

Is that normal from the bank? Does it make sense to go to another one or is it the same there?

I didn't need something like that. And what does the architect want 8K€ for!? To check three offers?

Best regards
Dirk Grafe

We are also heading into additional financing. Our advisor just wanted to know why we need more. I then sent him the list of unforeseen costs (more earthworks, more expensive sewage pump, switching to a heat pump, suddenly a multi-utility house entry necessary, etc.) and that was that. He said if we want to proceed with the additional financing, we should get in touch, and then he will quickly prepare the paperwork.

The three quotes are only for the exterior, everything else is the costs for the interior and the balcony. For that, the architect would have to come by and take a look. And then calculate the presumably incurred costs. And whether the three quotes are enough for him, I don’t know either, since they are just quotes and not binding cost estimates, which would also cost money. Only one person mentioned the 8k, the others didn’t want to say anything about it before an inspection took place. It’s just stupid, I have quotes and I have shopping lists, and now I’m supposed to organize an architect for that...

Is that normal from the bank? Does it make sense to go to another one, or is it the same there?

Let's put it this way. €100,000 as follow-up financing is not a small amount.

And yes; the bank can require that the cost breakdown is at least signed off by an architect.

What do you want from another bank? At that amount, it goes into the land register. And your current one is already listed there. Besides, you probably still have an interest rate lock for the current loan, right?

The only situation where a new bank makes sense is if the current bank properly rejects the follow-up financing.

There are also modernization loans, but they are mostly only up to €50,000 (e.g., from Ing-Diba) without an additional land register entry and without many documents specifying what it's for.

As Caspar already said, you are tied to the bank. Either a bank provides a subordinated loan at worse conditions or the action loans from Ing-Diba. You took out 290k and paid it down to 246k within 3 years. That's why I don't understand the caseworker either. I would put some pressure on them and then possibly go one level higher.