Two questions about financing

Dear forum,

I have been a silent reader of this forum for a long time and try to get closer to the subject of construction every day – let’s say, with limited success, since the topic is simply very complex.

For this reason, we have come across the Verbraucherzentrale several times, which, among other things, also offers the review of architect contracts as well as advice and even conclusion of construction financing (as a kind of broker) in Hamburg.

Question: Has any of you ever used this service and realized the construction financing through the Verbraucherzentrale?
The cheapest construction financing is available from the so-called “direct providers”. These are brokers who work with various banks. They offer the respective financing request to these banks. The bank that makes the cheapest offer gets the financing. In the event of the contract being concluded, the bank pays the broker/direct provider a commission – usually 1 percent of the loan amount. However, you ultimately pay this commission through a correspondingly higher interest rate.
With our service, we take over the request for offers and give you access to the best deals. Through an internet platform, we have access to a total of 100 banks. For this, however – unlike direct providers – we do not receive any commission from the banks. The conditions we present are therefore usually better than those of the direct providers.
In addition, we have direct contact with local providers in Northern Germany. Here too, we can help you get good conditions.

We then send you a financing application, which you return to us completed. We obtain the cheapest offer for you and invite you to a personal meeting to discuss the final financing with you. If the documents are complete, you will usually have a loan agreement ready for signature within the following ten days.

Question 2: We already have a plot of land that is currently being developed as a building plot and will then be included as equity in the financing. Since we do not yet have construction financing, we are currently paying architect fees (for the first 2 service phases) and development fees out of our equity. So far, that is 10k EUR. Will these costs also be taken into account later in the financing?

We are still in the planning phase with our architect and want to start building by March next year.

If this question has already been asked here, I unfortunately could not find it.

Best regards from Hamburg

Hello from the Rhineland,

With our service, we take the task of obtaining offers off your hands and give you access to the best offers. Through an internet platform, we have access to a total of 100 banks. However, unlike direct providers, we do not receive any commission from the banks for this. The terms we present are therefore usually better than those of direct providers. [I]We then send you a financing application, which you fill out and send back to us. We obtain the most favorable offer for you and invite you to a personal meeting to discuss the final financing with you. If the documents are complete, you will generally have a loan agreement ready for signature within the following ten days.[/I]

That is a bold statement which I would not readily believe. Moreover, this sounds very much like "cheap" at its best; financing does not work this way if it is to be serious and tailored to the respective situation. Sometimes an apparently more expensive financing offer can ultimately be much cheaper than a seemingly lower interest rate would suggest.

Despite all the focus on "CONSUMERS" – I consider this approach a worrying development; but it ultimately only shows that the consumer advice center is on its way to something higher (whatever that may be) ...

In addition, we have direct contact with local providers in Northern Germany. Here, too, we can help you get good conditions.

Anyone who has ever had an evaluation from the consumer advice center regarding their scope of supply on their desk will be enthusiastic :confused: Although, to continue to be fair, there is another association that evaluates even more strangely. Insofar, I am (still) not sure what to make of this offer from the consumer advice center.

Rhenish regards

Thank you. That’s how I felt too. If something sounds too simple, it is unfortunately usually too simple. That’s why I copied the text here.

So we will stick to our plan to go through the banks and credit institutions and simply form our own opinion. I don’t want to be penny-wise and pound-foolish here.

Thank you for your help and greetings back from Hamburg.

Hello,

1- Large intermediaries have a very good overview of the financing landscape. Find out for yourself. Go to your house bank and ask 1-2 intermediaries.

2- Usually, these costs are no longer included in the loan-to-value determination.

2- as a rule, these costs are no longer included in the loan-to-value determination.

We have/had the exact same situation.

Plot of land available. Architect already commissioned. Development costs to be paid.

For us it was clear: We will build as soon as we have approval from the city that the development is completed.

Our timeline looked like this:

09/2012 - Plot of land
04/2013 - Start of development
08/2014 - Commissioning of architect
03/2014 - Financing with term starting from 06/2014
06/2014 - Submission of all documents to the city (approval-free procedure)
07/2014 - Approval / start of construction

It was agreed without any problems with the architect that he would issue the first invoice once the financing was secured. It was proven, however, that we could also pay him (the worst-case scenario for him) should the banks reject.
This way, we could still easily register the money on the bank statement as equity ;) The first invoice from him then came in 05/2014. I gave this invoice to the bank, and the bank then deducted the invoice amount from the equity (which we had declared before the financing) in their calculation.

The plot of land was fully credited by the bank, including the development costs. For the bank, it was then irrelevant for further calculation whether we still pay these costs ourselves (which we will) or have to finance them.

Maybe this helps.