Construction financing at your local bank: benefits and risks
Construction financing at the house bank is the first choice for many. Read this article to find out why this is not always the best decision and what the alternatives are.
The most important thing to the construction financing at the 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 product selection.
- A financial intermediary can tailor construction financing to your individual needs.
- A comparison of several offers is a prerequisite for favorable construction financing.
- Do not settle for the first best interest rate offered by your house bank.
What are the advantages of taking out a mortgage with your bank??
If a construction financing is pending, the first way is as a matter of course to the bank where you also have your current accounts, the so-called house bank. The following arguments also speak absolutely for it:
- Trust: You know and trust your primary bank.
- Personal contact person: You may already have a contact person on site whom you can approach immediately.
- Financial situation known: The house bank can inspect your documents and advise you in this regard.
- Convenient: it saves you from having to search for a new provider.
These advantages are crucial for most people, so they usually turn to their local bank for construction financing. But you can't always get the best financing solution this way.
Use our construction interest calculator to determine your personal rate as well as an individual interest rate, also taking into account regional offers from our portfolio.
Construction financing and current account at the same bank – does this bring advantages?
If you have the current account and the construction financing with the same bank, the bank has 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 check whether salary payments have been received, for example, by looking at the checking account.
If there are no installments at all, incoming payments on the current account are immediately used for the construction financing. You may then not have the ability to meet your monthly expenses from it. If the construction financing and the current account are at different banks, you can control this yourself.
Why is a construction financing at the house bank not always the best choice??
The following points speak against a construction financing at the house bank:
- Limited offer: The house bank is anxious to offer your own products. However, they do not always offer an optimal financing solution based on your personal situation.
- Lack of alternatives: If you decide on a certain term or an unscheduled repayment option that is not offered by your bank, there are no alternatives.
- Sense of obligation: If you have been with a bank for a long time, you may feel obligated to accept offers that do not meet your expectations. Your decision is then not objective.
- Advertising attempts: If you decide for a construction financing with the house bank, it requests an information over all further accounts as well as funds. This information can cause the bank to entice you away from other banking institutions.
There are other ways to take out a construction loan. This does not necessarily have to be done at the house bank.
What advantages does a financial intermediary offer for construction financing??
A suitable alternative to a construction financing with the house bank is a:e financial mediator.:in. As the name suggests, a financial intermediary stands between you and a bank. We summarize the resulting advantages:
- Unbound: A:e financial mediator :in has no specific financial institution behind it. They work unbound and can therefore advise neutrally.
- Product selection: Financial intermediaries can put together the right financing solution for you from a range of providers, completely individually and tailored to your needs.
- Free advice: Financial intermediaries are usually financed by commissions from the banks. This means that advice is free of charge for you. There are also no costs for you when concluding a contract.
- Market knowledge: A:e financial intermediary:in knows the market as well as the offers. Do you desire a special term for your loan or a free repayment rate change , your:e financial intermediary:knows in the offers.
- Offer comparison: Your financial intermediary compares the offers of different providers for you. You are spared the tedious process of going from bank to bank.
- Fair offers: Financial intermediaries:are interested in offering you a customized financing solution. If they think a financing is not suitable, they say so openly and honestly and offer solid alternatives.
Our 700 local advisors in over 250 locations provide all-inclusive, unbiased and understandable advice. If you are planning a construction financing, contact one of our specialists right away.
How do financial intermediaries differ from your bank??
So that you get a better picture of both possibilities, you get an overview in the following table.