The lending value is an estimate; it does not change that easily. Even €20,000 more or less in costs does not matter. It also must not be changed arbitrarily. We usually apply our lending values (for large commercial properties) throughout the entire fixed interest period – however, the market value changes regularly.
Completely wrong, I cannot confirm this statement in relation to 90% of banks at all. If I increase the costs and increase the requirement, then I agree; but if the costs remain the same and the requirement is reduced, then a lower lending ratio results, which can lead to better conditions. This assumes that the approved and available funds are sufficient to realize the project as stated in the submitted construction documents, the contract for work or architect’s contract, and the construction service description.
This becomes clear, among other things, when it comes to the amount of own contribution, which increases both the costs and the available funds and balances out in the financing plan, but with a higher own contribution lowers the lending ratio despite the neutralization in the cost plan. The own contribution – of course only if it is planned – must be added to the requirement and then deducted again if available. If I do not do this, different lending ratios result and these can lead to significant deterioration in conditions.
Not a few consumers conceal or do not consider parts of their equity in the financing plan even in the case of modernization because they believe they will provide this as own contribution, and this leads to shifts in the lending ratio determined by the bank for the conditioning, since value-increasing measures are not made accessible to the bank. In a new build, this own contribution item is a variable element that lowers the lending ratio in interplay with the architect and the construction company.
Furthermore, one should also know and consider that every builder can make shifts with regard to the trades, is not 100% bound to the cost breakdown, and can make changes during the construction phase. In addition, one must and should know that for many banks the costs, the cost plan, are decisive for determining the lending ratio and thus for conditioning, and not the internally determined desk appraiser or appraiser value, and thus the conditions are determined based on the cost plan. If you know this, then you also know that the costs can be prepared accordingly, because an architect does nothing else, and for one, a trade costs €2,000 and for another €3,000, similarly one house costs this from one company and the same house costs that from another company. No bank controls every construction progress in detail, no bank compares this with the stated costs,
rather it is decisive that the builder is aware of his costs and builds the house with the available funds in the way that the construction documents, the contract for work or architect’s contract, and the construction service description stated and confirmed at the time of application.
These variables and this little flexibility allow the preparation of acquisition costs to be designed so that one or two percent can be improved and the next better lending limit can be reached.
Before complaints arise,
of course the internal cost planning must work out if own contribution is factored in, but it does not have to be identical 1:1 with what is submitted to the bank, so that the house will then be completed as presented to the bank.