Klaus Herbert
2015-04-30 11:18:17
- #1
Hello everyone,
my wife and I want to build a single-family house and have already purchased a plot of land for this purpose. We recently visited the architect and were somewhat surprised by the cost estimate. He quoted us €480,000 gross eligible costs for our plans (about 180m² living space, plus roughly 60m² usable space in the basement or outbuildings, double carport or garage). Together with the land (€165,000 including ancillary costs, developed, 1200m²) as well as additional costs and simple outdoor facilities, I quickly arrive at a total budget of €700,000!
That is initially a lot of money! Until now, I thought we could manage with €550,000 - €600,000. Nevertheless, I believe that we can afford the €700,000 and would like to ask for your opinion.
My wife is a civil servant in the senior service, and I am an engineer at a DAX corporation. We are both around 30 years old. Our current gross income is €126,000 per year, which results in a net income of €7,000 per month. We do not have children yet; they are planned after building the house.
Equity:
Land: €153,000
Savings: €75,000
Savings over the next 12 months: €40,000
Parental grant: €130,000
Total equity: ~ €400,000
Emergency reserve (stocks, etc.): €25,000 (should not be touched!)
So, we would need a loan of €300,000. That means, with an interest rate of 1.3% p.a., fixed for 15 years, and a 30-year repayment period, a monthly installment of about €1,050.
Currently, we have expenses of about €3,700 per month, of which €1,075 is cold rent (semi-detached house). This also explains the €40,000 that we will still save over the next 12 months. I know our expenses very precisely because I have been meticulously keeping a household account book for years. Rare purchases like a new washing machine or TV are also included, as well as vacations or depreciation of the cars!
In this situation, I see absolutely no problem. But as already mentioned, we want children, and then the situation might look different. Now there is parental allowance etc., but I simply calculated a "worst case":
"My wife does not work at all and takes care of the children."
In this scenario, I arrive at a net income including child benefit of €4,300.
Current expenses without cold rent: €2,600
Additional expenses for 2 children: €700
Loan installment: €1,050
Savings from shorter commute: -€300
Total: €4,050. There is not much room left then...
Now, this is a situation that might only last 1-2 years. First, there is parental allowance; later my wife can at least work part-time again. As a civil servant, that is no problem. Then there would also be an additional €1,300 - €1,800 net income. Some salary increases on my side could also still arise. On the other hand, unforeseen expenses could occur during the house construction, and things like new furniture, a nice garden design, etc. are not included yet.
Are we taking on too much???
my wife and I want to build a single-family house and have already purchased a plot of land for this purpose. We recently visited the architect and were somewhat surprised by the cost estimate. He quoted us €480,000 gross eligible costs for our plans (about 180m² living space, plus roughly 60m² usable space in the basement or outbuildings, double carport or garage). Together with the land (€165,000 including ancillary costs, developed, 1200m²) as well as additional costs and simple outdoor facilities, I quickly arrive at a total budget of €700,000!
That is initially a lot of money! Until now, I thought we could manage with €550,000 - €600,000. Nevertheless, I believe that we can afford the €700,000 and would like to ask for your opinion.
My wife is a civil servant in the senior service, and I am an engineer at a DAX corporation. We are both around 30 years old. Our current gross income is €126,000 per year, which results in a net income of €7,000 per month. We do not have children yet; they are planned after building the house.
Equity:
Land: €153,000
Savings: €75,000
Savings over the next 12 months: €40,000
Parental grant: €130,000
Total equity: ~ €400,000
Emergency reserve (stocks, etc.): €25,000 (should not be touched!)
So, we would need a loan of €300,000. That means, with an interest rate of 1.3% p.a., fixed for 15 years, and a 30-year repayment period, a monthly installment of about €1,050.
Currently, we have expenses of about €3,700 per month, of which €1,075 is cold rent (semi-detached house). This also explains the €40,000 that we will still save over the next 12 months. I know our expenses very precisely because I have been meticulously keeping a household account book for years. Rare purchases like a new washing machine or TV are also included, as well as vacations or depreciation of the cars!
In this situation, I see absolutely no problem. But as already mentioned, we want children, and then the situation might look different. Now there is parental allowance etc., but I simply calculated a "worst case":
"My wife does not work at all and takes care of the children."
In this scenario, I arrive at a net income including child benefit of €4,300.
Current expenses without cold rent: €2,600
Additional expenses for 2 children: €700
Loan installment: €1,050
Savings from shorter commute: -€300
Total: €4,050. There is not much room left then...
Now, this is a situation that might only last 1-2 years. First, there is parental allowance; later my wife can at least work part-time again. As a civil servant, that is no problem. Then there would also be an additional €1,300 - €1,800 net income. Some salary increases on my side could also still arise. On the other hand, unforeseen expenses could occur during the house construction, and things like new furniture, a nice garden design, etc. are not included yet.
Are we taking on too much???