Basic / Home Financing Split?

Hello, I have a question about house/property financing.

It concerns the fact that we are in negotiations with Bank 1 (current owner of the property and it is a requirement to finance with them) about the land purchase. The question arises whether we should finance the entire construction project through Bank 1 or only the land, because I was told earlier that a maximum 15-year fixed interest rate is possible (but we have to wait and see). That is simply too little interest rate security for me for complete financing.

Now I am wondering if it would be wiser to finance only the land through Bank 1, to put some of the equity in there and to finance the house etc. myself through Bank 2 and to use the house along with my parents’ land as collateral with a mortgage there (my parents just want to help) as well as KFW subsidies (homeownership and energy-efficient building).

Is that possible? Is that smart? I would be grateful for further tips!

Best regards

Bank 1 will be registered as the first priority in the land register. Then finding a Bank 2 for home financing will be difficult and certainly only possible with an interest surcharge.

Do you want to start building very soon after purchasing the plot? Or have you perhaps planned a buffer of 2 years?

That is exactly the question. Does Bank 2 have to be listed in the land register of the house or can the land charge be registered in the land register of my parents' house? The plan is actually to build quite soon.

That's exactly the question. Does Bank 2 have to be listed in the land register of the house, or can the land charge be registered in the land register of my parents' house? The plan is actually to build quite soon.

Yes, that's possible.
But don't be surprised, you will face strong opposition to this plan here (in the sense of "you are risking your parents' assets") – at least that was the case for me when we planned something similar and I asked for advice here.
The banks themselves have no problem with this approach.

*Massive headwind* I am probably a bit different in that regard. My parents raised me and paid for me for about 20 years. Now that I am standing on my own feet, it is the other way around. I support them to the best of my ability. I would never think of demanding even more from my parents They had enough stress with me... You were warned

We have the support of my parents, so from there it should not be a topic of discussion. It would definitely be great if we could do it that way because we are dependent on Bank 1 regarding the property. Of course, it would be good if we could finance everything through Bank 1 if the conditions are right, but if they already say there is a maximum 15-year fixed interest period, then the only logical option would be to finance just the property with them and the rest through another bank. Thanks

maybe. But I am not you. My parents always support us voluntarily, and if we get better conditions that way, why not. No one is being forced to do anything here. This is not about risk compensation but about better conditions. There is no risk because we both earn money (despite Corona). Of course, I would enable the same for my child. After all, one never stops being a father or mother. Or would you deny that to your child? Then we are definitely made differently.