sauerpeter
2016-11-10 11:52:52
- #1
Hello everyone,
when is signing a financing agreement sensible? Before or after signing the construction contract?
I am undecided:
- Before signing the construction contract, the advantage is that I know the financing is secured and I don’t have to worry about not finding a bank later to finance my project. Although, I would include a clause in the contract that allows me to withdraw from the construction contract if the financing fails. But if by then building application documents have been compiled, etc., I have to pay for that out of my own pocket.
At this point, however, I am a bit afraid that the construction company might still back out during negotiations. For example, we had our construction service description and the construction contract checked. Both need significant adjustments. If the contractor does not want to do this or refuses, I have to consider whether I can live with the unchanged terms or take the risk or not. If not, I would have to start the search from scratch and the financing or the period of free commitment interest runs out.
- After signing the construction contract, I would only be afraid that we might not get the loan. We do have a lot of equity (six-figure) and both a good net income, but sometimes things are just strange :(
My wife is on parental leave until the end of May, then will go back to work normally in a permanent position. That is the point where I’m afraid the banks won’t cooperate and say, come back when your wife starts working properly again, so that we know she really takes up employment again. These concerns were immediately dismissed by two financial advisors who said this would not be a problem, but sometimes things are just strange.
What would you do?
when is signing a financing agreement sensible? Before or after signing the construction contract?
I am undecided:
- Before signing the construction contract, the advantage is that I know the financing is secured and I don’t have to worry about not finding a bank later to finance my project. Although, I would include a clause in the contract that allows me to withdraw from the construction contract if the financing fails. But if by then building application documents have been compiled, etc., I have to pay for that out of my own pocket.
At this point, however, I am a bit afraid that the construction company might still back out during negotiations. For example, we had our construction service description and the construction contract checked. Both need significant adjustments. If the contractor does not want to do this or refuses, I have to consider whether I can live with the unchanged terms or take the risk or not. If not, I would have to start the search from scratch and the financing or the period of free commitment interest runs out.
- After signing the construction contract, I would only be afraid that we might not get the loan. We do have a lot of equity (six-figure) and both a good net income, but sometimes things are just strange :(
My wife is on parental leave until the end of May, then will go back to work normally in a permanent position. That is the point where I’m afraid the banks won’t cooperate and say, come back when your wife starts working properly again, so that we know she really takes up employment again. These concerns were immediately dismissed by two financial advisors who said this would not be a problem, but sometimes things are just strange.
What would you do?