Construction financing, failure, and setbacks

Hello everyone!

I wonder to what extent you have already thought about the construction financing or, before that, the fundamental considerations for buying/building a house regarding what happens if one of the borrowers becomes seriously ill/dies and there are longer-term financial losses. I am not talking about a job loss, which can usually be compensated fairly quickly. Have you all secured your incomes with disability insurance or similar?

We completed our construction financing in 2017 and already back then decided to take out only one loan that one person alone could manage. Now it is 2021, I am 32 and my husband just turned 34, and I have been diagnosed with breast cancer. Since I am still in the diagnostic phase, it is not yet clear what lies ahead of us. It will probably amount to roughly one year with sick pay, and then hopefully I can work again. This means we will lose part of my net income on the one hand, and on the other hand, my husband will probably have to take care of the children mostly for months while working his 40-hour week. He cannot reduce his hours; that would cost us too much monthly. Since he is the main earner, the financial loss will have to be absorbed by me, even though it already hurts. Of course, for higher costs (we now have two school children, medical expenses).

Not to mention that I am currently writing my doctoral thesis alongside my part-time job. This will suffer as well, and possibly I won’t even be able to complete the doctorate. This could also indirectly lead to losses in my planned self-employment in the coming years. By the way... thank God I am currently employed!

Fortunately, we now have families who could support us in an emergency. So far, we have managed without their help, we have not inherited anything, we have built everything ourselves. Still, it is reassuring to know that you can knock on their door if necessary. If all else fails, we will have to reduce the repayment; currently, we repay at 3%.

I have to say, I always thought, ok, maybe someone has an accident and is out for a while. We have life insurance, accident insurance too. Maybe someone loses their job, then after 2-3 months they have something new. But that it would hit me with cancer at 32 years old, I suppose nobody expected that. I was always healthy, I don’t smoke, I don’t drink. I think we will get through this time. And I am now very grateful that we financed sensibly back then....

Oh ... I am sincerely sorry for you. I still remember well how exhausted my mother was when she received exactly the same diagnosis. Fortunately, a lot has changed in medicine, and if discovered early enough, it is still reasonably treatable. Since cancer occurs quite frequently in both our families, that was also a reason why we included such hardships as long-term illness, unemployment, and disability in the financing calculations and chose the annuity accordingly low. This, of course, also means not fully exploiting the financing and building the house smaller than the budget would allow.

I wish you all the best to begin with. You will get through this time.

Your example clearly shows why we have _no_ disability insurance. In the case of a one-year absence with a good prognosis, afaik it does not pay out.

Being flexible to bridge temporarily is definitely a good thing. But selling the house would not be the end of the world for us either. We have also already lived excellently without a house.

We are only doing an RLV. If all else fails, we can sell the house for a profit (if it is built :-) ). That would not be the end of the world either.

Thank you for your words! It was discovered in time and did not spread, so the prognosis is good.

A house sale would actually be possible here with a really big profit. At least for me, that would not be an option, only in the most extreme emergency. I love our house, we have also done a lot ourselves and I have put a lot of heart and soul into the renovation and especially into my garden. I would no longer want to give that up.

I am now annoyed that we had not secured me as well as my husband yet. We wanted to do that in the next few years, when I would also have really started working again. Now, of course, it will be much more difficult and expensive to insure me. We have a family with pre-existing conditions, but I would not have expected that at least before the age of 40. This naive assumption is now coming back to haunt me. I had aimed to adjust the insurance policies by no later than 35.

I'm sorry. The prognosis is quite good if recognized early. I have disability insurance that also pays temporarily and not just when nothing else is possible. With my ex-husband and first house, we took out a term insurance policy, but it only pays out in case of death. As an employee, after 6 weeks you receive 66% of your salary monthly from your health insurance as sickness benefit. I think, when I see other younger women who were confronted with this crisis, that you will still manage your daily life at home and can be there for the children most of the time. I wish you and yours good luck. Don't think the worst right away :)