Preparation for bank meeting during restructuring

  • Erstellt am 2015-12-03 09:40:44

roadrun87

2015-12-04 16:24:19
  • #1
Could there be a good reason to finance renovation and purchase price separately?

Perhaps a bit of additional info: It is my parents' house, the purchase price is about 40% of the market price, and the renovation cost comes on top. Most of my equity goes towards the kitchen, furniture, and outdoor area. In other words, the desired financing covers the entire purchase price + renovation.
 

Elina

2015-12-04 21:25:14
  • #2
The separate financing of the renovation and purchase price resulted from the fact that the processing of the application by the energy consultant and the bank took forever. But it was no problem at all, a land charge had to be added, I don't even know if that cost any fees... I don't think so, and if it did, then maybe about 200 euros or so. The only memorable thing about it was: the bank initially granted 100% financing of the house, but then added another 60k on the land charge, without any securities except for a risk life insurance policy that we had to take out in case of death. That already tells me that the house was actually worth significantly more than the purchase price. Otherwise, it would have been a 140% financing and I don't think any bank would do that. I still haven't really understood how the lending value and the house price are related. Probably not at all.
 

Kreditberater

2015-12-07 08:39:30
  • #3
Hello roadrun87,

if you acquire the property at 40% of the market value, then the financing is definitely not a problem. You just have to make sure that the bank actually uses the significantly higher market value for the loan-to-value assessment and not the agreed purchase price, so that you get the best possible interest rates!!

What percentage of the loan does the purchase price make up and how high are the renovation costs?

I would definitely only apply for the financing once you have the complete cost breakdown and are confident about the costs. The bank should then definitely approve the "complete package" of purchase and renovation. I definitely cannot recommend applying for purchase and renovation separately, as you will then have a significantly weaker negotiating position regarding the renovation loan.

Good luck, Andreas
 

roadrun87

2015-12-07 10:17:53
  • #4
The purchase price accounts for approximately 55% if I include the equity investment in the renovation. The renovation largely consists of "want-to-have" items. The condition of the house is very good. The outdoor area does not need to be changed since everything is new. Under renovation costs, I have already included items such as flooring and painting work. Also, the bathrooms are completely equipped. In addition, the entire building is to get new windows and doors, the roof insulated from the inside, etc. Electrical = KNX
 

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