Be well prepared for the construction financing discussion

Many of my customers face important questions: What do I need when I go to the bank? What should I pay attention to when talking about financing? What do I have to say?

I like to let my customers understand that this is why I like to visit them at home.The answer to the question why I'm doing this is that I can probably find everything relevant to funding at their house.

But what are the documents that customers have to "rummage" together to prepare for the construction financing discussion?

In advance, I always try to explain to my customers that building finance is not an insurance policy. There is much more at stake here. It's a decision that shapes most people's lives.

That's why banks, building societies and insurance companies also want a lot of information.

First and foremost, it's about the house builders. You always need an ID document to legitimize the person. Of course, the ability to service capital is also checked first. That's a "banker's word" and means looking to see if there's enough surplus left. This can be determined by subtracting the expenses from the income and taking into account a life allowance from the bank. For this, the bank needs salary statements for the last three months.

Data such as tax ID, date of birth, entry date and in most cases the IBAN are also available. Three months also to be able to calculate an average.

Of course, it always makes sense to bring evidence that shows the equity.Here it is not wrong to have the annual account statements ready for home savings contracts and life insurance. In addition to the last 3 months, you can also provide bank statements for savings accounts.(Tip: Especially when financing is scarce, you can score extremely well with a bank with bank statements from the last 3 months. For example, the bank looks at the opening and closing balances of the bank statements. If these generally show good balances, this shows that customers have an orderly financial situation)

If the financing goes on for a little longer and beyond retirement, it also makes sense to have pension notifications ready so that you can show that financing is also possible in this case.

Now it comes to the object documents. If the new buyers want to acquire the new property without a broker, it is important to request the documents from the sellers. The bank is obliged to assess the risk of real estate financing and has the task of protecting itself and, above all, potential borrowers.

The bank does this by determining a loan-to-value ratio. This is the value that is important for "safety" afterwards. To put it simply, it creates an expert opinion.

For this she needs relevant data such as floor plans, sections and elevations. This allows the creditor to make a first impression. Besides this, the bank also needs a land register to make sure that there are no restrictions on the property. A restriction can be, for example, a building ban. A site map is also important and guarantees the lender that the property really does exist at the address.

In order to prove to the bank that the customers are not buying a bad object, it makes sense to also present an energy certificate. However, the bank is happy to compile a list of past modernizations with the borrowers themselves. You can prove everything very well with pictures. (TIP: Try to take the pictures so that the rooms look big and bright. Also make sure you take the pictures during the day.)

Of course, these are just a few documents that you can use to prepare. As a financing consultant, I always try to get as many documents as possible for my customers. I'm trying to relieve them of some of the work because there are really a lot of them. Ultimately, however, it also depends on what the financing is about. Completely different documents are important for a capital investment.