ᐅ What is equity according to the bank / notary fees in refinancing / general contractor or architect contexts?

Hello!
About two years ago, I purchased a plot of land in Berlin. I bought it for around 282 euros per m2 (square meter), the current land value is 360 euros per m2, and similar plots are being sold for about 480 euros per m2. I agreed on a fixed interest rate period of 5 years. The remaining debt after this period will be roughly 187,000 euros. The plan was to refinance after 5 years, including the house.

My partner and I would now like to start building somewhat earlier. The loan would be repaid about one year earlier. The prepayment penalty is a few hundred euros, which is not a problem, especially considering the now lower interest rates.

I have some initial questions regarding our plan:
1. What exactly does the bank count as equity? Is it only the amount repaid, or is the increase in property value also considered as security?
2. The land register (title deed) will be updated during refinancing. At the same time, my partner will be added to the land register. What costs are involved in this process?
3. We have enough time to research potential builders. We have already received various house catalogs. We want a house with two gables, brick facade, 140 m2 (1,507 sq ft), increased ceiling height of about 2.70 m (8.9 ft). Especially for the interior, I don’t want standard features (no typical “beech staircase,” higher quality tiles than 25–30 euros per m2, tiles throughout the house, a freestanding bathtub, etc.). We wonder whether it might be better for us to hire a construction manager or architect, even though we don’t want anything unusual in the floor plan or architectural style. We often read that these small special features in fittings and finishes cost a lot of money. What are your thoughts on general contractor versus architect?

By the way: I am a civil servant, 31 years old (from February earning 4,000 euros net), my partner is 32 and currently earns about 2,500 euros net. Our equity is about 30,000 euros. I would therefore describe our income and financial situation as solid.

Thanks in advance for your help.

Maybe someone knows a good architect in Berlin?

The land charge (Grundschuld) from your current Bank A will be transferred to the new Bank B, which initially does not cost anything.
Ordering a new land charge for an additional loan costs about 1100 euros at the notary and approximately 1000 euros at the land registry office. (This was our experience with a notary in Berlin and a property in OHV.)

What counts as equity varies from bank to bank.
In our case, the difference between the purchase price and the current standard land value (Bodenrichtwert) was considered equity. For you, this is 78 euros per square meter.
The current sale price does not matter to them; anything above the standard land value is considered speculation.

Hauherr2020 schrieb:

1. What exactly does the bank count as equity? Only the repaid amount, or is the increase in value also considered and used as collateral?

Both. The exact amount depends on how the bank values the land.

Hauherr2020 schrieb:

2. The land registry is updated during refinancing. At the same time, my partner should also be added to the land registry. What costs are involved for this?

You need to sell a 50% share to your partner. This involves notary fees, property transfer tax, and land registry fees. You can calculate these costs using various online calculators (for example, those provided by relevant brokers).

Hauherr2020 schrieb:

3. We have enough time to research potential construction companies. We have already requested several house catalogs. We would like a house with two gables, brick facade, 140 m2 (1507 sq ft), increased ceiling height (about 2.70 m (8 ft 10 in)). However, especially regarding the interior, I do not want standard features (no typical "beech staircase," higher quality tiles than 25-30 EUR per m2 (about 2.30-2.80 USD per sq ft), tiles throughout the entire house, preferably a freestanding bathtub, etc.). We wonder if a construction manager/architect might be better for us (even though we do not want anything extraordinary in the floor plan or architectural style). We often read that these small special features in the fittings can cost a lot of money. What is your opinion: general contractor or architect?

Both options are possible. It’s hard to say in general, but if you really want just a standard house, I lean toward a general contractor.

NicolasH schrieb:

The current sale price doesn’t matter to them; anything above the standard land value is speculation.

That is not correct. The standard land value is a REFERENCE VALUE, it is also based on past data and does not reflect the current market situation.

Thank you for your quick responses!