Provision interest-free period

Unfortunately, in our case the interest-free period for the loan commitment already ends six months after the printing of the loan offer by the bank. In return, we received more favorable interest conditions. Now the start of our renovation is delayed by two to three months. Thus, the commitment interest will be due soon, although the first invoices are estimated to arrive only in three months and loan disbursements can only be made then. In a construction financing guidebook we read that in such a case one should have the loan paid out and invest it as a savings account. This sounds plausible, but is not possible because we have to submit invoices to receive disbursements from the loan fund. What options do we have to avoid the commitment interest? Thank you very much!!

I see no chance without an invoice. Just pay, it won’t be that expensive for the three months.

Open a daily deposit account at the bank and it will then be pledged, so the bank has control over the money without proof of the invoices and you miss out on the interest.
Your advisor should know that too!

Regards!
Michael

Almost no banks do this anymore.... The [Bereitstellungszinsen] are generally more attractive for the bank.

Hello

So our bank pays us out the money for which they have securities. In the case of a new build, the security increases with the payouts. (Equivalent value of the completed trades)
Up to the current amount of the security, our bank pays us the money if we want to.

In the case of a renovation, there should at least be an equivalent value for a large part of the money. Therefore, it should be no problem if you have the money paid out.
So just ask the bank. Of course, it might be that every bank does it differently...

Regards
Micha

In a construction financing guidebook, we read that in such a case you should have the loan paid out and invest it as a daily deposit.

You can print out the guide and burn it immediately. Hardly any bank will pay out these amounts without proof. Why should they? YOU have to prove the construction status and based on that the bank will pay. If that is not the case, undrawn funds, see contract, will be charged nicely with a commitment interest.

What reason in the world should the bank have to waive contractually agreed interest (income) without any security whatsoever (construction status certified by architect)?

PAY AND ENJOY