Parental home as security

Hello everyone,

since we have no equity for our construction project, it is difficult to get a sufficient loan amount from the banks.

Does it help if my parents transfer their house to me so that I can use it as collateral?

Thank you very much

That is doable - depending on the value of your parents' house, but you are aware that your parents might end up on the street if you can no longer service your loan.

Theoretically it is possible, but that is way too risky... You can always get sick or something, and then you ALL end up on the street

So was gone for a few days - and already I’m reading nasty things from the pearl man again

In any case, I don’t consider it reprehensible like dear Austernfischer to just discuss and think about all kinds of (and maybe) strange ideas. It is still up to the prospective homeowner and their partner to evaluate these ideas.

On the technical side – if I remember correctly, I still owe a reply that will come via a personal route. Regarding the question raised here: parental home as additional collateral, transferring ownership of the parental home is not necessary. First of all, talk to the parents – it’s about additional collateral (e.g., €30,000), a transfer from the parents is not necessary. Partial assignment of an existing free land charge or the new registration of a land charge is sufficient. Always assuming the loan-to-value ratios are correct. If the parents are sure they want to help their child in this way, then with the collateral in the parents’ property, care must be taken that this is freed first through the ongoing repayments. Regarding the issue of insecurity due to illness, occupational or disability incapacity, and risk life insurance, it’s simply to say that financing WITHOUT these protections essentially should be avoided!! At least if you have a little bit of a sense of responsibility. I do not accept such. A good advisor performs a reasonable security check, examines, and advises properly. If the security does not fit into the wallet – HANDS off, or go smaller. Kind regards JoS

I am not nasty and why again?

but with such a "come hell or high water," my toenails curl up.

I'm not mean at all and why again?

I thought I remembered you being mean from another thread, if I'm mistaken there, then ashes on my head.

By the way, Perle, you are naturally right in principle: ownership should ideally also be spared, as I have already written elsewhere.

Still, there are a few cases where one can seriously consider and plan how to come into OWNERSHIP.

For example, I imagine a high school teacher who, as unfortunately quite common in RLP, initially works as a temporary/substitute teacher in an EMPLOYED position. Payment - minimal, saving opportunities poor.
If this person then gets a permanent position and becomes civil servant, the situation looks completely different. This scenario is also possible in other variations, e.g. a mechanical engineer who has completed their BA. Job is secure, salary good – see what I mean?
Therefore, I tend to listen to people first; implausible things will become obvious once they are present.

By the way, it honors the oystercatcher when he warns others against uncertain investments.
Temporary living in one's own home is not really desirable, yet it will increasingly occur in the coming years.