How to finance?

Hello Hello :)

So, I'll start, I am 31, my husband 30, and our children are 5 and 1 year old. I am currently on parental leave + a side job earning 400,-, my husband is an employee. My husband earns 1600,- (net) + child benefit 360,- A plot of land owned by us worth approx. 35,000,- is available and also our only equity. (Self-construction labor probably performance, life insurance, building savings contract, etc.) would be added. My husband has 100% Schufa, unfortunately mine looks a bit different, I have only 58%. Because of this, a house construction contract already fell through due to financing (Ing-Diba)!:mad: I really can’t understand that because normally the husband is the main borrower?:confused: The state subsidy would be 80,000 euros and they also do not want to see Schufa, however the other required 80,000 euros must be financed through a bank. The question is only through which one? We don’t want to wait another 2 years until my Schufa is back to 100%. :eek: I hope to get a few well-meant tips on what we can hopefully do. Best regards

Hello Sabrina,

I take you at your word and name the problems with your financing:

...also our only equity.

That is too little! In total, you should be able to provide about 20% of the entire construction cost. And not "only" in the form of land, but also in account balance :rolleyes: For example, for a construction project with "only" 200,000€ total costs, you would need to have about 5,000€ in additional equity besides the land.

My husband has a Schufa score of 100%, but unfortunately mine looks a bit different, I only have 58%

Why do you have a Schufa entry? That will make financing an entire house impossible! You must definitely check your personal creditworthiness in a self-disclosure and get your Schufa back in order!

Because of this, a house-building contract has already fallen through due to no financing (Ing-Diba)! :mad:

That is usually the consequence...

I just can’t understand because normally the husband is the main borrower? :confused: The state subsidy would be 80,000 euros and they also don’t want to see a Schufa, but the other 80,000 euros need to be financed through a bank. The question is only through which one? We also don’t want to wait 2 years until my Schufa is back to 100%. :eek:

You are married? Then you both are responsible for the loan and thus also your Schufa. There is no "main borrower." It would be different if only your partner (if you were unmarried) would undertake the house construction. You should also not wait 2 years considering the rising interest rates...

Therefore
1. Eliminate your Schufa entry
2. Build up equity ("only" showing 10,000€ to the bank proves that you are capable of saving something and handling money responsibly)
3. Mobilize other things: What kind of home savings contract is that? Is it even worth it for you? Could it maybe already be ready for allocation?
4. Expand funding! There are certainly more subsidies for your situation!

I hope to get some well-meaning tips on what we hopefully can do
Best regards

I hope you have received them

Hello,
just ask an Austrian construction financier. They are currently even offering 105% financing here in Germany, and with the equity capital, I see the best chances there.
Try it via finanzservice austria on the Internet.... Friends of mine have done that too - and it worked out great.
Regards Pierre86

Hello,

Try it via finanzservice austria on the Internet.... Friends of mine have done that too - and it worked great.

Against the background of the situation described by Sabrina, I consider this (certainly well-intentioned) advice to be fatal, if not irresponsible. Nobody has anything to give away - not even foreign investors who want to establish themselves here. I am fairly certain that - if Sabrina takes this tip and is also promised financing - the big crying won't be long in coming.
From her current income, the expected loan installment as well as the living expenses to be deducted cannot be disputed. Therefore, at best, financing with a high equity share will be possible - BUT the materials for this must also be purchased, as well as the expertise required for the own contribution!

@Sabrina
Not everyone necessarily has to own a house at a young age; given your situation, I can only strongly advise you to heed the advice mentioned by the previous poster and first get your credit report (Schufa) in order and then save at least 25% equity. If you then tackle the "house building" project equipped in this way, it will not only be healthier but also much safer for your future ;)

Kind regards

I started myself with 105% financing and now, 8 years later, through hard-nosed calculations and my provided services, (I have taken advantage of every conceivable additional payment), refinanced last year with a German bank and live in the Munich area cheaper than if I had to pay rent. Certainly, we also had to provide a lot of personal effort, but with the help of friends and by thoroughly "reading into the topic," it was doable. The houses built next to us 2 years later have higher rent today than our financial burden. It is also a matter of self-discipline. And that is something only everyone can answer for themselves. Of course, that means saving, saving, saving the first few years.... Vacation and so on can be forgotten for the first 10 years. Gardening and DIY are then more appropriate. Regards Pierre

I myself started with a 105% financing and now, 8 years later, through tough calculations based on my services rendered (I took advantage of every possible special payment), refinanced last year with a German bank and live in the Munich area cheaper than if I had to pay rent. Certainly, we also had to provide a lot of own work, but with the help of friends and appropriate "reading up on the subject," it was doable. The houses built next to us 2 years later have rents today that are higher than our financial burden. It is also a matter of self-discipline. And only each person can answer that for themselves. Of course, that means saving, saving, saving the first years... Vacation and so on can be forgotten for the first 10 years. Gardening and handiwork are then more on the agenda.
Regards, Pierre

@ pierre

That may be absolutely true for your situation, but in the situation to be analyzed with Sabrina, I consider it far too risky to choose such a financing model.

A 105% financing is appropriate when the builder has equity capital but does not want to use it, for example, to continue enjoying a higher standard of living or similar => in other words, can rely on their equity capital as security for tough times. OR earns so much that a 105% financing can be handled and additionally equity capital can still be built up. That is not the case with Sabrina!

Financing without equity is also significantly more expensive. Financing without equity reserves can quickly backfire, for example, if the heating system in the house breaks down. That could then quickly mean financial ruin. In that case, not only for Sabrina and her husband but also for 2 children.

Best regards