ᐅ What is the process? Hire an architect first? Then approach the bank / government loan programs / home financing schemes?
Created on: 19 Sep 2016 12:12
A
alegend
Hello everyone!
A few weeks ago, we purchased a plot of land, which was paid for just a few days ago.
We have already met with an architect, and now we want to move forward quickly so we can start building next spring.
The question is: what is the exact process? We have already requested financing offers from banks but haven’t signed anything yet.
Of course, I want to sign as late as possible since the loan commitment is usually free of charge for up to 12 months.
Therefore, we thought about hiring the architect right away to at least make some progress; otherwise, we would have to wait again. If the architect sends an invoice soon, we could potentially cover it with our own funds...
The loan shouldn’t be a problem because our income is high enough, and we plan to choose a relatively small monthly payment based on our income.
What do you think? We have little experience and are not sure how the process should go exactly.
So far, we have only had a brief, general meeting with the architect.
Regarding KfW applications, we also don’t know yet which energy efficiency standard we will aim for, since that depends on the costs...
Thanks in advance for your support.
A few weeks ago, we purchased a plot of land, which was paid for just a few days ago.
We have already met with an architect, and now we want to move forward quickly so we can start building next spring.
The question is: what is the exact process? We have already requested financing offers from banks but haven’t signed anything yet.
Of course, I want to sign as late as possible since the loan commitment is usually free of charge for up to 12 months.
Therefore, we thought about hiring the architect right away to at least make some progress; otherwise, we would have to wait again. If the architect sends an invoice soon, we could potentially cover it with our own funds...
The loan shouldn’t be a problem because our income is high enough, and we plan to choose a relatively small monthly payment based on our income.
What do you think? We have little experience and are not sure how the process should go exactly.
So far, we have only had a brief, general meeting with the architect.
Regarding KfW applications, we also don’t know yet which energy efficiency standard we will aim for, since that depends on the costs...
Thanks in advance for your support.
I know this because I have to set limits and hold back equity, and the loan-to-value ratio will be adjusted accordingly.
We have already talked to the architect, and the budget was clearly outlined. I’m aware it probably won’t stay that way. But the budget has to be established—what else should the bank base its decision on? Just on the architect’s calculations, and if those don’t match my budget, then something’s off. 🙂
However, your point is valid—especially as the basis for calculations for the bank, which is why they will definitely want some information from the architect... and I basically have to see them beforehand anyway, or am I mistaken?
We have already talked to the architect, and the budget was clearly outlined. I’m aware it probably won’t stay that way. But the budget has to be established—what else should the bank base its decision on? Just on the architect’s calculations, and if those don’t match my budget, then something’s off. 🙂
However, your point is valid—especially as the basis for calculations for the bank, which is why they will definitely want some information from the architect... and I basically have to see them beforehand anyway, or am I mistaken?
There is some room for negotiation regarding the date from which you have to start paying interest on the loan disbursement.
For example, I asked if it would be possible to set a date no earlier than 2018, based on the status as of September 1, 2016.
The advantage of this is that if there is any remaining loan amount at the end that you cannot repay in one lump sum before the forced payout, you can take advantage of the turn of the year to make two additional prepayments (one for 2017 and one for 2018) and therefore repay the borrowed money more quickly.
Alternatively, you can also negotiate the amount that needs to be repaid right before the end of the lending period.
Furthermore (although this was only mentioned verbally), it was implied that if things get tight financially, this date can be adjusted later on. This largely depends on trust. Since the banker has been known in our family for many years, that trust is established. It might be different in your case.
The bank’s offer usually remains valid for about a month. So if you want to start quickly, you still have some time before you formally accept the offer. Generally, the terms don’t get worse after that, but the interest rate may be adjusted to the current market rate. However, a reputable bank should not change the other conditions.
Also, a reputable bank will not pressure you.
As mentioned before, your own equity will be used first.
I will also be the last to sign with the bank; they will not disappear.
What I want to say is that it’s definitely not a lost cause.
For example, I asked if it would be possible to set a date no earlier than 2018, based on the status as of September 1, 2016.
The advantage of this is that if there is any remaining loan amount at the end that you cannot repay in one lump sum before the forced payout, you can take advantage of the turn of the year to make two additional prepayments (one for 2017 and one for 2018) and therefore repay the borrowed money more quickly.
Alternatively, you can also negotiate the amount that needs to be repaid right before the end of the lending period.
Furthermore (although this was only mentioned verbally), it was implied that if things get tight financially, this date can be adjusted later on. This largely depends on trust. Since the banker has been known in our family for many years, that trust is established. It might be different in your case.
The bank’s offer usually remains valid for about a month. So if you want to start quickly, you still have some time before you formally accept the offer. Generally, the terms don’t get worse after that, but the interest rate may be adjusted to the current market rate. However, a reputable bank should not change the other conditions.
Also, a reputable bank will not pressure you.
As mentioned before, your own equity will be used first.
I will also be the last to sign with the bank; they will not disappear.
What I want to say is that it’s definitely not a lost cause.
Sounds pretty good overall :-)
The offers I have now with the top interest rates come from an online platform—I had an online consultation there. Unfortunately, my main bank’s rates are significantly higher, especially for loan-to-value ratios below 80%—here I’m seeing a 0.4 percentage point difference. The downside with the online platforms is that the offers are only valid for a very short time. I’m not sure if I can still negotiate or if this is already the best deal I can get...
But honestly, I don’t care where the money comes from—terms and conditions are what matter. If a bank offers me a better rate for 20 years than my main bank does for 15 years, I know what I’ll choose, and I don’t think I’m alone in that. That said, I plan to approach my bank again. Have any of you had experience with this?
The offers I have now with the top interest rates come from an online platform—I had an online consultation there. Unfortunately, my main bank’s rates are significantly higher, especially for loan-to-value ratios below 80%—here I’m seeing a 0.4 percentage point difference. The downside with the online platforms is that the offers are only valid for a very short time. I’m not sure if I can still negotiate or if this is already the best deal I can get...
But honestly, I don’t care where the money comes from—terms and conditions are what matter. If a bank offers me a better rate for 20 years than my main bank does for 15 years, I know what I’ll choose, and I don’t think I’m alone in that. That said, I plan to approach my bank again. Have any of you had experience with this?
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HilfeHilfe19 Sep 2016 15:17I would have the architect carefully calculate everything. A bank also needs to review it on a solid basis. Loan-to-value ratios below 80% (eighty percent) are not insignificant either.