Employer loan is not sufficient

Hello,

my husband and I want to build. First, a few important details about us. I hope I won’t be stoned immediately. My husband had already built a house with his ex-wife. The loan could no longer be serviced due to missing salary payments (employer now insolvent) – after a long battle, personal bankruptcy was declared (remaining debt €56,000). The house was auctioned off. The insolvency has been ongoing since 02/2013. Since my husband was able to have money garnished from his salary (new employer), the court costs and trustee’s fees are secured, and the application for discharge of residual debt is underway, so the procedure will end in February 2018 (after 5 years). His employer is granting us an employer loan amounting to €180,000 - €220,000 (negotiations are ongoing, but at least €180,000 is certain). The required amount will, however, be €250,000.

Now to my question: Is it possible for me to take out a loan for the remaining amount? The employer will have the first charge registered in the land register. Since my husband will not be able to get a bank loan for the next 3 years due to personal bankruptcy (Schufa entry remains for 3 more years afterward), most likely only I can apply for this. What options do we have? And how would the bank’s security be handled then? The amount would be between €30,000 - €70,000.

My husband earns a net €3,200 starting 01.01.18 and I earn €1,350. We have one child together, and I brought 2 children into the relationship. I also receive €200 in maintenance and a total of €582 in child benefits. Equity as of 01.01. amounts to €7,500.

I hope you can help me. Thank you very much. Nicole.

An almost 100% financing is very difficult. I am not sure if the bank can be registered as second priority.

Do you have equity? That is not entirely clear. If not -> why not? Why build a house then? With the income, saving equity should not be a problem.

Equity amounts to €7,500 as of 01/01.

It says there.

If not -> why not? Why build a house then? With the income, saving equity is not a problem.

Because the man is in private insolvency. But I would also advise against the project. In your place, I would wait until the insolvency phase is over to see how to manage with the money and save something again. Especially with construction, a certain buffer should be factored in. Have you taken that into account? Whether you get that much money from the bank in a subordinated position, you have to ask the bank. But if so, it probably won’t be without interest surcharges. Speaking of which: Are the interest rates of the shareholder loan good?

Such answers I have already feared - that it will be rather difficult. The reason for considering building a house now is the high rent we are currently paying and preferring to invest this into a home of our own. The "certain" buffer is planned and also the interest rates from the [AG] are good. But still, many thanks for your answers.