Construction financing with the house bank: advantages and risks

Construction financing with the house bank is the first choice for many people. Read this article to find out why this is not always the best decision and what alternatives there are.

The most important facts about construction financing with a house bank

  • The house bank is familiar to you, but does not always offer you the best deal.
  • The house bank is very limited in the product selection.
  • A financial intermediary can tailor a construction loan to your individual needs.
  • A comparison of several offers is a prerequisite for a favorable construction financing solution.
  • Do not settle for the first best interest rate offered by your house bank.

What's in favor of construction financing with a house bank??

When it comes to financing a construction project, the first port of call is, of course, the bank where you have your checking account, the so-called house bank. The following arguments also speak absolutely for it:

  • Trust: you know and trust your house bank.
  • Personal contact: you may already have a local contact person whom you can approach immediately.
  • Know your financial situation: the house bank can see your documents and advise you on them.
  • Convenient: you save yourself the search for a new provider.

These advantages are decisive for most people, so they usually turn to the house bank for construction financing. But this is not always the best way to obtain financing.

Do the math!

Use our interest rate calculator to determine your personal rate and an individual interest rate, taking into account regional offers from our portfolio.

Construction financing and current account at the same bank – does that bring advantages??

If you have the current account and the construction financing with the same bank, the bank will have access to all your finances. It registers exactly when there are incoming payments on your current account and in what amount. If there are delays in installment payments, the bank can look at the checking account to see whether salary payments have been received, for example.

If there are no installments at all, incoming payments on the checking account are immediately used for construction financing. You may not be able to cover your monthly expenses from it. If the construction financing and the current account are with different banks, you can control this yourself.

Why is construction financing with the house bank not always the best choice??

The following points speak against construction financing with the house bank:

  • Limited offer: the house bank is anxious to offer its own products. However, they may not always offer the best financing solution in light of your personal situation.
  • Lack of alternatives: if you decide on a certain term or a special repayment option that is not offered by your house bank, there are no alternatives.
  • Sense of obligation: if you have been with a bank for a long time, you may feel obliged to accept offers that do not match your expectations. Your decision is then not objective.
  • Advertising attempts: if you decide for a construction financing with the house bank, it asks for an information about all further accounts as well as funds. This information may lead the bank to entice them away from other banking institutions.

There are other ways to take out construction financing. This does not necessarily have to be done at the house bank.

What are the advantages of using a financial intermediary for construction financing??

A suitable alternative to construction financing with the house bank is a:e financial intermediary.:in. As the name suggests, a financial intermediary stands between you and a banking institution. Let's summarize the resulting advantages:

  • Unbound: a:n financial intermediary:in does not have a specific financial institution behind it. They work independently and can therefore provide neutral advice.
  • Product selection: financial intermediaries can put together the right financing solution for you from a wide range of providers, completely individually and tailor-made.
  • Free advice: financial intermediaries are usually financed by commissions from the banks. This means that advice is free of charge for you. There are no costs for you even when concluding a contract.
  • Market knowledge: a financial intermediary knows the market and the offers. Do you want a special term for your loan or a free repayment rate change , know your:e financial intermediary:in the offers.
  • Offer comparison: your financial advisor compares the offers of different providers for you. You are spared the tedious process of going from bank to bank.
  • Fair offers: financial intermediaries:inside are interested in offering you a customized financing solution. If you consider financing to be unsuitable, say so openly and honestly and offer solid alternatives.

Our 700 local advisors at over 250 locations provide comprehensive, unbiased and comprehensible advice. If you are planning to finance a construction project, contact one of our specialists right away.

How do financial intermediaries differ from the house bank??

In order to get a better picture of both possibilities, you will find an overview in the following table.

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