Construction financing without equity capital, but with other liabilities

Why so complicated and long?

Short form: unseizable income: 1,201.72

You can’t finance a construction loan with the "rest".

Why so complicated and long?

Because of #10 by the thread creator. Since he explains here why he does not consider his idea a "crazy idea" (his expression), it was necessary to calmly show him with calculations why it cannot work. Especially if one has so far perhaps only dealt superficially with the topic of construction financing/installment burden (at least that is how his previous statements seem), this can definitely help.

Pay into building savings contract. I don’t know what this is called in technical circles.

It’s called TA (payment suspension) bullet maturity combined with a building savings contract for repayment after allocation. Building societies often only go up to 80% of the lending limit. I’d be surprised if the whole thing could be processed above that; but asking costs nothing.

However, one situation is absolutely incomprehensible to me:

A married couple, both employed. Income (joint) €4500 gross. Equity €30,000.
A loan for a new build of €250,000 is approved.
An individual without equity, income €2100 gross, loan amount €80,000 is not approved.
Even a bank advisor couldn’t give me an answer as to why the loan with the higher risk is approved and the other loan is not.
Now one might think it’s because of the two incomes. In my eyes, however, this is no security.
How can something like this be?

Quite simple. Two salaries. More than twice as much is garnishable. Also, the standard living expense calculation is somewhat more favorable in this case, since two people in one household have lower costs than two individuals separately. In addition, all incidental purchase costs and even a bit more have been paid off with the equity.

In other words, if it comes to realization, the bank’s chance of coming out without loss is significantly higher.

Existing property purchase + renovation is often rated differently by banks than a new build. (Renovation costs are often not fully accounted for as value-increasing).

Short version: exempt income: €1,201.72

Well, there is definitely something fishy there.

Especially since the €150 for the student loan still come on top.

As I already wrote at the beginning: forget it. Dreams remain dreams. Otherwise, off to the bank, they will tell you the same.

Realistically, your concern has now been raised by many.

I don’t think there is anything more to add.
Definitely, an existing property very quickly becomes a pit, no matter how motivated and skilled you are at craftsmanship.

Wait another 1-3 years and save as much as possible. maybe in the presented amount of the new "Finanzierungsrate".

Then you will quickly notice whether it gets tight or not and at the same time have saved equity. This also makes it easier to negotiate with banks.

Usually, some banks still offer 100% financing, but the ancillary costs must definitely be covered by equity.

Don’t make a hasty decision now, even if you are highly motivated at the moment!

Why so complicated and long?

Short version: non-seizable income: 1,201.72

You can't manage a construction loan with the "rest."

+150 student loan and 1,500 net mean a 150€ payment for the house is doable. For 10,000€ principal, you roughly pay 40€ (of course depending on interest period, interest rate, installment, etc.), so you get about 40,000€. Without the student loan, it could actually work if you bring in some "significant" equity (where it's obvious you can save money) (e.g., a few years old building savings contract or something similar). The bank really doesn't care if you live frugally or not. But to mortgage a 50,000€ house for 80,000€ or more with someone who barely has more than the non-seizable amount is more than harakiri for the bank. In case of default, the bank gets a 50,000€ house (which wouldn't be worth more than 30,000€ even with renovation) – especially since it's not guaranteed that the 30,000€ will even significantly increase the value – and has to cover an 80,000€ loan with that 50,000€. That will never work. Unfortunately, the fact of the matter is that conditions like having a rich father don't interest anyone. The only chance I see here would be either a partner with their own income or a guarantor with money (e.g., parents with paid-off property).