Process of bridge financing

Hello :) I have a few questions about bridge financing regarding house construction (and later sale of the old house). 1. What would the process of this bridge financing be? As I understand it, you receive the amount of the bridge financing as soon as you have found a plot of land and then repay it in one lump sum as soon as you have the money from the existing (sold) house. The actual loan for the house is then tied to this. Is that correct? 2. I have read that with a bridge financing loan you "only" pay the interest (which is relatively high). From when do you start paying the interest on the bridge loan? Is it also a monthly installment and how much is it on average? Sorry, but we have just started to inform ourselves and are still completely clueless.

Interest is paid on the disbursed part of the loan. The installment depends on the amount and the interest rate. As well as possibly commitment interest.

If the existing property is to be part of the financing, there are two options:
1. Sale of the old property (ideally with a right of residence for x months), finance the remaining money through a bank, build, move
2. Bridge financing with the bank, build the house, move, sell the old house, repay the loan

Option 2 has the risk that you are dealing with two unknowns. You not only don't know how expensive your construction will really be. You also don't know at what price you will be able to sell the old house. Since there can often be 1.5-2 years between financing the new building and selling the old building, this exposes you to a not insignificant risk

Okc, you would basically have to pay a monthly installment? Because I read that a bridging loan is a bullet loan, meaning it has to be repaid in a lump sum at the end…..

Okc man müsste dann quasi monatlich eine Rate bezahlen? Da ich was gelesen hatte, das eine Zwischenfinanzierung ein endfälliger kredit ist, also erst am ende in einer Summe zurückgezahlt werden muss …..

Installments = interest has nothing to do with repayment or final maturity. You always have to pay interest. With a bullet loan, however, you do not repay the loan amount through amortization (part of an annuity loan installment, consisting of interest and principal repayment), but rather in a lump sum at the end. Your loan installment then consists only of interest. So with a €400,000 interim financing, you pay €1,700 interest every month and at the end of the interim financing you repay the aforementioned €400,000 all at once.