Alternatives to construction financing?

Hello,

my wife and I are looking for an alternative to construction financing. Although we can guarantee the required installment payment (with the help of mother-in-law from abroad), we cannot get financing from banks due to the currently missing income. There are no guarantors.

Our current living situation (detached house, built around 1886, in need of renovation, living area approx. 50 sqm, twins 1 year old) requires a quick and uncomplicated solution.

Our plot is about 1000 sqm and we want to build a new house. The land register is unencumbered, as it was paid in cash 3 years ago.

Are there possibly construction companies that build the house on their own account with corresponding security in the land register and then we pay the monthly installment to the company?

Or are other means and ways conceivable? Who has tips or suggestions for us?

Best regards

Hello

this will be an impossible task. What credit volume are we talking about and what is the value of the property?

Why is income missing? Is there none at all or very low income?

As quirky as the headline is, so is your concern. You want to finance a construction without a construction loan. In other words, the myth of rent-to-own. You want someone to build for you, then bear the risk, and you pay them the installment... That's called rent. With the small difference that at the end of the "rental period" you claim the house as your property. I don't know if what you're looking for exists, but I honestly can't imagine it. Because even the person who builds for you wants the same securities as a bank. One solution would be to bring the mother-in-law to the table, officially. She signs the loan agreement and offers her assets as collateral. Then a bank can be found. Currently missing income means you have no job at all, or is the total net income just insufficient for the bank?

whereas income from abroad will pose a problem for German banks.

It is best if the mother-in-law pays for everything.

Hello,

We can guarantee the required installment payment (with the help of mother-in-law from abroad), but due to the currently missing income, we are not getting financing from the banks. There are no guarantors.

Are there possibly house construction companies that build the house on their own account with the corresponding security in the land register and then we pay the monthly installment to the company?

Or are other means and ways conceivable? Who has tips or suggestions for us?
Best regards

To my knowledge: No. The construction companies would then have to provide advance performance and tie up a lot of capital in the long term. For this, they have an unclear repayment situation (from their point of view).

In other words, myth of rent-to-own.

This could possibly still be a variant, although I have never understood the advantages and disadvantages of rent-to-own. Therefore, for me, it is just a "myth" as well.

where income from abroad will be a problem for German banks.

Not necessarily. There are banks (e.g. Ing-Diba) that do not grant credit if income is received from abroad.
But there are also plenty of banks that have no problem with that. It would be bad otherwise, then many people in our region could not build at all (cross-border commuters Luxembourg) - myself included.
Therefore, the option of mother-in-law as (second borrower) should possibly be discussed with the bank (and beforehand with the mother-in-law).

small additional note:

If you don’t want to operate on the gray market, lending companies in Germany need a license from the Federal Financial Supervisory Authority and must then comply with corresponding accounting, controlling, capital requirements, etc. (these regulations are more extensive than the average customer realizes.) For these reasons alone, a construction company will probably not want to tie such a burden to its leg.

I don’t know how it works with platforms that mediate loans from private individuals to private individuals. But due to the amount involved as well as the uncertain income situation, it would probably be doomed to fail anyway.

Joke warning: Try funding . Such donation campaigns for various purposes are said to work in the USA.