Hello,
I have the following problem. The company we want to build with (let’s call it Stadt und Land) gave me a financing offer two weeks ago (10-year term) and then submitted an application to Ing-Diba. We also plan to take out two KfW loans totaling €50,000.
Now, this week I received a much better offer with a similar interest rate but for a 30-year term through my insurance company.
My problem is that the building planner naturally sees his commission at risk and insists on receiving it (he is very firm about this). So, he initially sent me two alternative offers from Ing-Diba, but they only have a fixed interest rate period of 15 years (Ing-Diba does not offer longer).
Just now, he called me and said he could arrange the same offer as the insurance company (also through the insurance) and thinks it is only fair that he gets the contract since he has put so much work into it.
Here’s the catch! Since the KfW loans were approved for Ing-Diba, we have to apply for switching banks with KfW (the fact that these funds can only be assigned once and are then blocked for 6 months was not mentioned by the guy).
The building planner told me on the phone that we have no choice but to sign the contract with him because we need his signature to access the KfW funds or to transfer them to another contract.
It feels a bit like blackmail. I now suspect that if I do not sign the contract with him, we will only encounter more problems during the construction, and I have a really bad feeling about this right now.
Wouldn’t it be fairer to award the contract to the person who first gave me the best offer?
Should we perhaps look for another building company? Maybe even an architect?
I’m a bit at a loss and have completely lost motivation for building by now, but I’m really glad that we haven’t signed anything yet (construction contract, etc.), only a power of attorney for the bank.
I hope someone can help me out. ((
I have the following problem. The company we want to build with (let’s call it Stadt und Land) gave me a financing offer two weeks ago (10-year term) and then submitted an application to Ing-Diba. We also plan to take out two KfW loans totaling €50,000.
Now, this week I received a much better offer with a similar interest rate but for a 30-year term through my insurance company.
My problem is that the building planner naturally sees his commission at risk and insists on receiving it (he is very firm about this). So, he initially sent me two alternative offers from Ing-Diba, but they only have a fixed interest rate period of 15 years (Ing-Diba does not offer longer).
Just now, he called me and said he could arrange the same offer as the insurance company (also through the insurance) and thinks it is only fair that he gets the contract since he has put so much work into it.
Here’s the catch! Since the KfW loans were approved for Ing-Diba, we have to apply for switching banks with KfW (the fact that these funds can only be assigned once and are then blocked for 6 months was not mentioned by the guy).
The building planner told me on the phone that we have no choice but to sign the contract with him because we need his signature to access the KfW funds or to transfer them to another contract.
It feels a bit like blackmail. I now suspect that if I do not sign the contract with him, we will only encounter more problems during the construction, and I have a really bad feeling about this right now.
Wouldn’t it be fairer to award the contract to the person who first gave me the best offer?
Should we perhaps look for another building company? Maybe even an architect?
I’m a bit at a loss and have completely lost motivation for building by now, but I’m really glad that we haven’t signed anything yet (construction contract, etc.), only a power of attorney for the bank.
I hope someone can help me out. ((
baschti schrieb:
But I wanted to find someone reliable to build with in the next 1-2 weeks.
The loan application has only been submitted for now, and then we’ll see what the bank says or what documents they still require. baschti schrieb:
At first, only a loan inquiry was made... Hello baschti,
somehow you seem to be mixing up the terms – or maybe we are?
Has only a loan inquiry been made, or a loan application?
A loan inquiry is a kind of preliminary request to check if the lender would basically be willing to finance your project within the specified framework. At this point, nothing is binding yet – you can still change everything (loan amount, terms, fixed rates, etc.) as needed and manageable for you.
With the loan application, you take the next step. Here you make a binding request to the lender. They will then, for example, check your credit history and send you the contract documents, which must be signed and returned within a certain period. Once signed, the loan is fixed (except for a possible withdrawal right). From this point, the interest-free period for the loan availability begins – once this period ends, you will have to pay availability interest on any unused loan amount.
I can also recommend that you check whether your lender would in principle finance you. After all, you’ll probably only build once. Therefore, you shouldn’t put yourself under pressure choosing your building contractor but rather take your time to look and evaluate carefully.
For us, it took over a year from the first talks with potential contractors to signing the contract – if you had asked us beforehand, we would have estimated a maximum of 3 months.
We only finalized the financing two weeks before signing the contract. Had we done this at the beginning of our talks, I would already be paying availability interest now, at the start of construction – not to mention that I now know approximately how much the house will actually cost. With the initially estimated amount, we would now be severely underfinanced.
D
Doc.Schnaggls13 May 2014 11:58Hello baschti,
like several previous posters, I can only recommend putting your financing request on hold for now.
It doesn’t make sense to request a certain amount X now if you will actually need amount Y later.
Also, the insurer may not be willing to provide a new offer on short notice again.
In the worst case, the insurance agent might assume you don’t know what you want and may not prepare another offer at all...
Therefore: find a reliable building partner and determine the actual financing needs based on a solid quote and including the expected additional costs.
Only then approach the insurer.
Regards,
Dirk
like several previous posters, I can only recommend putting your financing request on hold for now.
It doesn’t make sense to request a certain amount X now if you will actually need amount Y later.
Also, the insurer may not be willing to provide a new offer on short notice again.
In the worst case, the insurance agent might assume you don’t know what you want and may not prepare another offer at all...
Therefore: find a reliable building partner and determine the actual financing needs based on a solid quote and including the expected additional costs.
Only then approach the insurer.
Regards,
Dirk
Masipulami13 May 2014 13:00I can only agree here as well. In the end, the total amount is still not enough, and then what? Expensive additional financing?
The topic of building a house should be approached step by step (and in the correct order). Otherwise, there will be a harsh awakening in the end. Trying to find a partner at all costs within 2 weeks is definitely the wrong approach.
The topic of building a house should be approached step by step (and in the correct order). Otherwise, there will be a harsh awakening in the end. Trying to find a partner at all costs within 2 weeks is definitely the wrong approach.