Hyponex
2022-02-15 08:48:48
- #1
Hello
so if you write:
"That ultimately has nothing to do with the completion of the house or anything like that. It’s about drawing the loan COMPLETELY. Whether the house is finished or not is initially not relevant.
And of course, if I am paying commitment interest at another bank where only €50,000 is still outstanding, the amount is logically not as high as €280,000 at MHB."
then it probably has something to do with the "construction progress" (ok, it doesn’t necessarily have to be the completion of the house!)
because MHB is drawn completely, when? When the pre-financing is fully paid out through the house bank (which is probably linked to construction progress)
otherwise the entire amount from MHB could have long since been drawn = then no commitment interest would arise here = then there would be no double burden...
I find it very interesting what kind of constructs people build to save some money... but then if delay or whatever comes, that saving is gone, because as you can see here, you have to pay twice (interest for drawn funds at one bank, then construction period interest at the other bank because it has not yet been drawn).
so a construction takes time, yes
delays can occur, yes
why don’t people do something else? So we are talking about a bridging loan, i.e. pre-financing the sale of the property, because the equity is tied up there.
such a construction takes time. Many banks offer bridging loans very expensively (around 2.75-4.25%), which over 1 year or longer really adds up.
what I did myself (equity in the house that is to be sold after moving)
I financed it fixed for 1 year, with 1.20%, cheaper than a bridging loan (which can be repaid anytime), for that I was initially bound for 1 year (if I repaid after 9 months, I would have had to pay prepayment penalties for 3 months)
the plan was of course to sell the house after 1 year and repay the bridging loan.
of course the construction took longer, we are now finishing the outdoor facilities, so 1.5 years have passed already. After 12 months the bank simply changed the loan to a variable loan, which currently runs at 3%. For the few months it doesn’t hurt that much, but is mainly flexible...
BUT not every bank offers such a construct.
so if you write:
"That ultimately has nothing to do with the completion of the house or anything like that. It’s about drawing the loan COMPLETELY. Whether the house is finished or not is initially not relevant.
And of course, if I am paying commitment interest at another bank where only €50,000 is still outstanding, the amount is logically not as high as €280,000 at MHB."
then it probably has something to do with the "construction progress" (ok, it doesn’t necessarily have to be the completion of the house!)
because MHB is drawn completely, when? When the pre-financing is fully paid out through the house bank (which is probably linked to construction progress)
otherwise the entire amount from MHB could have long since been drawn = then no commitment interest would arise here = then there would be no double burden...
I find it very interesting what kind of constructs people build to save some money... but then if delay or whatever comes, that saving is gone, because as you can see here, you have to pay twice (interest for drawn funds at one bank, then construction period interest at the other bank because it has not yet been drawn).
so a construction takes time, yes
delays can occur, yes
why don’t people do something else? So we are talking about a bridging loan, i.e. pre-financing the sale of the property, because the equity is tied up there.
such a construction takes time. Many banks offer bridging loans very expensively (around 2.75-4.25%), which over 1 year or longer really adds up.
what I did myself (equity in the house that is to be sold after moving)
I financed it fixed for 1 year, with 1.20%, cheaper than a bridging loan (which can be repaid anytime), for that I was initially bound for 1 year (if I repaid after 9 months, I would have had to pay prepayment penalties for 3 months)
the plan was of course to sell the house after 1 year and repay the bridging loan.
of course the construction took longer, we are now finishing the outdoor facilities, so 1.5 years have passed already. After 12 months the bank simply changed the loan to a variable loan, which currently runs at 3%. For the few months it doesn’t hurt that much, but is mainly flexible...
BUT not every bank offers such a construct.