Pay for the land in cash or finance it?

A paid-off property counts as equity!

klblb, I don't believe that the solution you found with your bank can be considered generally binding.

I would pay in cash.

And the first question that arises for me: Is the property sold at full value or is there a "family discount"?

For example: If the property is valued at €100,000 and you only pay €70,000, your equity with the bank increases by another €30,000 without you having to do anything for it. Because the bank doesn't care what you paid for it, but how high they estimate its value.

It would be the same the other way around. So if you bought a property above value.

Thank you very much for the suggestions.

When a bank grants a construction loan, they only lend the money for actual construction costs, right?
What happens if the 15,000 cash after the purchase is not sufficient? Will I then get money from the bank?

If the 15,000€ cash is not enough, you will also get what you need additionally. The decisive factor for an appraisal is always ALL costs, including incidental costs. In the overall consideration, it is decisive whether you come to a financing need below or above 100%.

Example: You have a plot of land worth 100,000€. 0€ cash. The house costs 300,000€ and incidental costs 50,000€.

The 50,000€ for incidental costs you will also get without problems from the bank in this case, because you bring Römer as the equivalent in the form of the land. So you will get a total of 350,000€, probably also without exceeding a loan-to-value ratio over 100%.

Thank you very much for the feedback. That helps me.

To complete this: Yes, there is a small family discount, so that might be an argument. However, a savings bank advisor told me that they only take the value that is stated in the purchase contract. Whether the standard land value or the market value is higher does not interest her. But apparently not everyone sees it that way.

P.S.: Then I guess I still have to find Romans. Hopefully, they will actually come along to the bank :-P

To complete this: Yes, there is a small family discount, so this might be an argument. However, a savings bank advisor told me that they only take the value that is stated in the purchase contract. Whether the standard land value or the market value is higher would not interest her. But apparently not everyone sees it that way.

Local banks should know what the land is really worth. When push comes to shove, the bank doesn’t sell at the price stated in the contract, but at market value. So I would politely decline the lady at the bank...

Is what you want to buy a single plot among already developed ones or within a new development area?