Banks for 110% financing

Situation: both civil servants full-time, me A12, my partner currently A9, from next year A10. In total, we have a net income of a little over €5500 per month, with an upward trend of €200 as a raise is planned in March. My amount includes child benefit for my 15-year-old son and family allowance. In addition, there is €174 semi-orphan’s pension for my son and my widow’s pension (which will expire next year at the latest due to my income), both not included in the €5500. Since we both were only recently appointed for life as civil servants and studied late (I was then a single parent with a child), we so far have only a manageable amount of equity, which we do not actually want to include in the financing but rather use as an emergency buffer.

We still want to build now for the following reasons: 1. we need 2 home offices and thus at least 5 rooms, which cost around €1800 cold rent in this area and are also very difficult to find, which is why we have still been living and managing households separately for three years. Better to invest this amount monthly in something of our own...

2. Of course, we could save for another 3-4 years to accumulate €30-40k equity, but at the same time we would continue to pay the same amount in rent, which is then gone, plus an increase in interest rates is to be expected. Therefore, better to borrow more now...

I only have a monthly car loan payment of €340.

Additional construction costs, land with incidental acquisition costs, and house are generously calculated at €425k. Which banks would be willing to grant a 110% financing with our professionally secure situation and income?

Oh, by the way, if age matters, we are both 36 And since we are planning kfw40, there will be a repayment grant added and a part of the loan from KfW funds...

Hello, unfortunately I can't help you with banks; but I would be interested to know how you divided the 425,000 among the different positions (land, incidental costs, house, etc.). Spontaneously, I wouldn't describe that as generous for everything together, since I wouldn't have necessarily assumed the Würzburg area to be cheap.

Edit: just saw:

65,000 for the plot, with incidental acquisition costs just under 70,000

House including foundation slab and kitchen 325,000

And additional construction costs 30,000€

It is actually cheaper for us to build than to invest in existing properties. The price per square meter in the new development area we are targeting is 130€

Existing properties, however, are in areas where the price per square meter is now set at 300-400 plus the value of the house... And then you still have renovation or at least refurbishment needs and effectively it cannot be had for less than 500k...

So, it may be that you can manage this in the long term with civil servant status, etc. But put yourself in the shoes of a bank. Two people come in asking for a mortgage loan of 440 thousand euros. At best, they can only secure 300 thousand. Because that would be the amount recovered if things go wrong and the house has to go into foreclosure. 140 remain unsecured. At the level of consumer credit... that’s the problem. What happens in case of divorce? Disability? Early retirement? Premature death of a borrower? These are the questions I ask myself as a lender. Additionally, banks are legally required to advise you and not offer such financing without equity to avoid situations like in 2005 in the USA. There will be someone who brokers this to you. Some offshore bank will surely do it. I would find it much better to start now with a high building savings contract with a secured low interest rate at maturity, and then build later. There will be land again, there will also be used properties, the trees never grow to the sky. Interest rates will rise, but the building saver has his guaranteed interest rate, whereas the price of real estate will stagnate or even fall. That has always been the case.

140 remain unsecured. At the level of consumer credit....

No no; consumer credit level at most the incidental purchase costs. There is nothing unsecured there...

In addition, banks are legally obliged to advise you and not offer such financing without equity in order to avoid situations like 2005 in the USA. There will be someone who brokers something like that to you. Some offshore bank will certainly do it. I would find it much better now to have a

The offshore thing is just nonsense

@TE: just go to a financing broker. Of course, the >100% is somewhat smaller; but actually many do that; except maybe Sparkasse or Volksbanken. Especially your net income is good.

Besides, you can actually get below 100% quickly with you. You only have to pay the incidental purchase costs for the land, as well as, e.g., the kitchen.

I read somewhere else that you have equity; but don't want to use it.

But why do you want kfw40??? With the current KFW 153 rates, that's not really appealing at the moment; and the additional costs are usually not covered by the repayment grant.