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Intermediate building loan financing: On the way to a building loan

In the past, rents have risen drastically, especially in metropolitan areas.

At the same time, low building interest rates make the building loan attractive.

Why not just move into your own home?

Many families legitimately ask themselves this question. And work towards this goal with a building society contract.

But how do you behave if there is capital in the home loan savings contract but it cannot yet be allocated?

A solution for this case is to use interim building loan financing .

Building money: Interim finance the building loan

Building money: Interim finance the building loan

The own residential property is in any case a considerable financial challenge and responsibility. Without real estate financing, the project only works in rare cases. However, a certain equity ratio cannot hurt. The building society contract ultimately combines both.

But: It usually takes several years before the capital is available – the building society contract is allocated. In everyday life, however, there are chances of owning a home that people are reluctant to miss.

One solution is interim building loan financing. This is a form of interim loan financing that has some special features.

Intermediate building loan financing: how it works

Intermediate building loan financing: how it works

With regard to the building loan, very different financing instruments can be combined today. In addition to the classic bank loan:

  • Funding programs
  • grants
  • Personal loans or
  • Building society contracts

always to be found in the financing concepts.

The building society savings contract offers the opportunity to start the project with equity capital, but the deadline has to be waited until it is ready for allocation.

But: Thanks to interim building loan financing, once the minimum savings balance – which is usually 40 percent or 50 percent – is reached, a loan that provides liquidity can be drawn on. The advantage is obvious. Thanks to the interim building loan, the builder can push the project home and take advantage of current price advantages.

Intermediate building loan financing – term and repayment

Intermediate building loan financing - term and repayment

In general, the term of an interim building society loan extends from several months to a few years. The repayment of the whole is usually made at maturity – with the amount that is ultimately available after the home loan contract has been allocated. At this point, however, builders must be aware that the total interest is on the entire term.

  • The interim financing causes a certain cost. This must be factored into the total cost ratio of financing – and the budget adjusted accordingly.