Can parents' building savings loan be included in the house purchase?

2021-05-06 23:01:16

Hello everyone,

my parents have a €40,000 home savings contract that will soon be eligible for allocation. They would like to support us with this €40,000 and somehow contribute it.

The loan must be used for a purpose related to housing. That’s why they obviously cannot just give us the €40,000 as a gift. Is the money allowed to be used for the property of a “third party” (us)? For example, to pay the ancillary purchase costs? Or is it only allowed for their own purposes?

2021-05-06 23:25:59

Why do you want to use the loan? Are the interest rates attractive at all?

2021-05-06 23:30:51

Why do you want to use the loan? Are the interest rates even attractive?

My parents want to use it and give it to us as a gift. They pay our incidental purchase costs with the loan and they repay the loan. The question is whether that is even possible.

Do you mean it would be cheaper if they took out a regular loan?

2021-05-06 23:42:25

So building savings amount 40 TEUR and building savings balance round about 16 TEUR?

Regarding the interest rate: It depends on your financial situation. Since the building savings contract is certainly about 8 years old, the interest rate will be significantly worse than the current construction financing rates.

Do your parents own debt-free residential property? If your parents absolutely want to go into debt to help you, then it might make more sense to offer the bank free land charge parts of the parental house (which I definitely would not want).

2021-05-06 23:49:04

Oh, and regarding your actual question:

Yes and no, that is possible. Your parents cannot take out the loan for your housing-related purpose but must specify their own purpose.

However, the following would be possible: Your parents transfer the building savings contract to you. You can then access the credit balance as well as the building savings loan (subject to creditworthiness). Your parents could then reimburse you for the monthly burden from the building savings contract.

2021-05-06 23:52:44

So a building savings contract amount of 40,000 EUR and building savings credit balance round about 16,000 EUR?

Regarding interest rate: It depends on your financial situation. Since the building savings contract is certainly around 8 years old, the interest rate will be significantly worse than the current construction financing rates.

Do your parents have unencumbered residential property? If your parents really want to go into debt to help you, then it might make more sense to offer the bank free mortgage parts of the parental home (which I definitely would not want).

Yes, that’s about right. A fully paid single-family house is owned by my parents. My parents receive high pensions but have not saved the 40,000 due to support within the family circle to give it to us. However, they definitely want to support us since my brother received the same support. That’s why their idea was to give us the money from the loan or to buy us something on the house and pay off the loan.

The question is basically only whether the money is allowed to be used for that at all.

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Can parents' building savings loan be included in the house purchase?

Arne1984

DaSch17

Arne1984

DaSch17

DaSch17

Arne1984