Refinancing

One speaks of refinancing if it turns out in the course of the construction project that the costs (and thus the financing requirements ) are higher than estimated and therefore a further loan is necessary in addition to the already agreed building loan .

The reasons for refinancing are

• Error in determining the financing requirement or
• Unforeseen cost increases

Since it is often not possible to provide valuable loan collateral for refinancing , the amounts are rather small compared to the original financing , but the workload is high, the interest for refinancing is usually higher than for a building loan.

A - mostly expensive - refinancing can be avoided, among other things, by planning a corresponding reserve for unforeseeable expenses / costs. Some credit institutions offer the option of foregoing loans free of charge if this reserve is not needed. This option is i. d. Usually limited to amounts up to 20,000 euros.