How best to use equity when buying a home?
Hello,
The following task:
Someone wants to buy a condominium. It's a new build and will be completed at the end of 2026 (construction began in early 2024). This means they have to pay commitment fees (or is it possible to avoid them?). 15% of the purchase price is currently available at the notary appointment. 25% is due at the start of construction. However, 22% of the purchase price is still available as equity in a fixed-term deposit account, and the payout is not possible until August. (Except in special circumstances)
The required loan is 63% (of the purchase price) from the bank.
All other costs are included.
My question: Do I have to close the fixed-term deposit account immediately so that the amount can be paid, or can I first ask the bank for a portion of the loan to pay to the developer first? (Would this result in lower commitment interest?)
What is the legal situation? What is the procedure?
(1 votes)
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You are not required to present the credit agreement for the whole summer in the event of a notary conclusion.
You are obliged to pay the agreed rates in a universal manner. If one finances first and second rates from equity, and only then goes to the bank, one saves provision interest. But bears the full risk of an increase in interest rates and also a rejection of the loan agreement.
What makes sense depends on the income and wealth initiative. The chief physician and the lawyer should be able to carry the risk without sleepless nights and can trade out a few 1/10 on interest rates. And at the moment interest rates are falling rather.
The sole earner who has to calculate exactly how he pays the rates, rather not. It pays the provision interest as insurance that there is no interest rate increase.
The provision interest can theoretically be dispensed with; These are not legally binding. However, as they represent money for the lender, it will certainly not want to do without it.
Legally, what has been laid down in the respective treaties is binding. Ultimately, everything is a matter of negotiation.
Just compare the variants of several financial services; without exact numbers you can only speculate. There are so many different ways to model this. And then you decide depending on the possible savings and the respective risk.
The construction financing must of course be fully paid into the “construction account”.
The bank shall then ensure that the payment is made in due time (after progress of construction).