Process of financing, experiences?

Good day,

my partner and I would like to build a house. The starting point is that we both currently live alone in small houses (we met only afterwards). Now we want to move in together into a self-built, larger house, as children are also planned. We are both employees with a monthly income of about 5400 EUR. Unfortunately, I have no idea about house construction & financing, but I am in the process of informing myself about everything. I am asking myself how we should best proceed if we like a plot of land. 1st option: sell a house beforehand, move (one of us), use the money for the plot & loan, move again (together) 2nd option: take out a loan for both, then possibly with special repayments (?), then after selling the houses we could put the money into repayment. Would we even get a loan with option 2? I ask for your opinions on how you would proceed here...

The bank would theoretically have both of your houses as collateral. Are these already paid off? If not, then it could be somewhat more complicated, as far as I know, because of the priority of the bank(s) in the land register. Unless you had your project financed by the same bank as at least one of your houses. What is ultimately cheaper can probably only be calculated for you by a bank advisor.

Thank you for the response, one house is paid off the other is not…

I would first move in together and sell a house. Not only because it is easier for financing, but also because it is a risky idea to build a house with someone you haven't lived with yet. I am the last person to condemn quick commitment, but how well you really know someone and how well you get along – living together already plays a big role in that. I would try that out first.

a risky idea is to build a house with someone you haven't lived with before.

It's best to rent that one out for only one year, then you risk nothing.

Later, if the interest rate of the unpaid loan allows, you could make a property switch: sell the paid-off one, pay for the land with the equity, and then use the reduced loan later in the exchange.
But of course, this "later" is not really predictable because you don't know how quickly you will find something or sell one or two houses.