Loan-to-value ratio and property purchase in cash?

Hello everyone,

I had an appointment with a financial advisor last week to find out how much credit we could approximately get from a bank.

In the process, I learned that the loan-to-value ratio is a key factor in determining the interest rate you get for the loan. Currently, we have about 106,000 euros in equity.

We do not have a plot of land yet. I would like to buy this with the equity. However, this means that I have much less equity left for the house construction and its loan. Does this mean that the loan-to-value ratio will inevitably look worse, or is the equity + land taken into account?

The property is treated as equity.

We do not have a plot of land yet. I would like to buy this with the equity.

The equity does not disappear because of this. In the financing structure, the plot of land then represents the equity portion. In the mortgage lending value of a property, the land value and the structural value of the house are processed together.

Thank you for the information. I assume that the bank itself assesses how much the property is worth. In my example, the owner demands 89 euros per square meter, although in this area it is only 60 euros on average according to boris.nrw.de.

The standard land values are based on the sale prices of recent years and do not reflect current prices. The bank should also be aware of this.

Land value is unfortunately hardly usable as a basis... It is not binding and is calculated at long intervals. I would advise against being below that...