Sell old house, build new one, how to finance?

Hello,

we have decided to build again and sell our house that was built 14 years ago. We expect to get approximately 300,000 euros for this house (40,000 euros remaining debt).
We have 180,000 euros in equity, which is intended for purchasing a plot of land.
For the house, we initially calculate costs of 350,000 euros including incidental costs. Thus, we would need to finance 100,000 euros as an annuity loan.
The problem now is the missing approximately 250,000 euros, which we will only receive when the house is sold. However, we would then have to move out and rent an apartment in the meantime.
Are there any other possibilities? The bank will not lend us 250,000 euros that we would have to repay all at once in one year, right?
Has anyone of you ever done this? Do you have any ideas on how to approach this?

Best regards
Sabine

We had a similar arrangement. In the past, this was called bridge financing. We set the term to two years so that we had enough time for the move and the sale of the old house. However, the exact options can surely be explained to you by the banker you trust.

Uh, but you are a bank clerk yourself... ??

Uh, but you are a bank clerk yourself... ??

Actually yes, but I have never worked in retail banking; I was responsible for the bank’s balance sheets.

Best regards
Sabine

Yes, the bridge loan is that. It can also be concluded with a variable interest rate, then it can be repaid at any time. You just have to get advice regarding the conditions.

However, when selling, it should be noted that after the notary appointment and handover (these appointments can be negotiated and contractually agreed upon), several weeks still pass until the land registry deed is created and you then receive the money. For us, it was 5 weeks after the handover.

Hello Sabine,

as Uwe already correctly writes, there is the possibility of bridge financing, which will probably work best with the house bank, as they know "Euch" and have had you as a customer for some time.
However, it might be worth considering, given today's interest rate, to let the money "work," insurance, e.g. an immediately starting pension insurance with installment payments or stocks, saving, or doing [Tagesgeld-Hobbing]. In the end, it could even pay off. Have fun and success with your project, gunar.

this proposal with a loan that has a variable interest rate sounds quite good. The question is whether the banks would actually do it. After all, that would be a loan amount of 350,000 euros! Would the bank then take our current house as security?

Best regards
Sabine