Application phase land - How do I finance everything?

Hello,

we would like to apply for plots of land from the city. It is questionable whether we can get a plot at all since we are unmarried and have no children.

I am M (29 years old) and work as a group leader in a shipping company, she is W 27 (years old) and works for the city (not a civil servant).

We would like to focus on the house exactly only when we have a concrete plot.
Our salaries are as follows: mine ~ 2200 € hers: ~ 1800 €

We have about 50,000 € in equity.

Possible plots cost including additional costs and development costs about 80,000 - 100,000 €. The prices vary depending on m² and location ([price zones]). Our desired plots are between 450m² and 550m². Construction on the plot must be started within 2 years.

So now to the main question:

How do I finance this? We already had a "preliminary" bank appointment where we were told that a basic construction financing would not be a problem. But I would first like to finance the plot and then take care of the house. A loan for the entire amount would be nonsense now, as I am not so far along in the planning yet.

Should I finance the plot flexibly here or already think about the house now, even though I do not have a concrete plot yet?

PS: I have quietly read a lot, but I am still not a pro in this area.

Regards HouseConstructionProject

Welcome to the forum

It is good that you have already read up properly. Then you might roughly know which flat rates can be used to estimate the costs of a house.
The total amount and the resulting installment should approximately fit your income, otherwise you won’t be able to build later. But I think and hope that you have already done that.
Plan for parental leave and possibly part-time work afterwards as well as daycare costs, because in the worst case you will have stronger dips. It could also get tight.
What do you estimate the construction costs and monthly loan installment to be?

And otherwise yes, first finance flexibly. It costs a bit more, but not the world. Then a big loan later.

In the municipalities I know, the application process runs separately from the purchase, sometimes even without any fees, so I would recommend applying first. If there is an approval, then you have some time (three to six months) before the purchase contract must be notarized. During that time, the financing should be clarified. If it doesn’t work out, the plot will simply be allocated to someone else.

I also think it makes sense to put everything into eine financing, especially if there are only two years for the construction. So you should start with the house planning after the approval, so that the necessary financing volume is clear.

Welcome to the forum

It's good that you have already done your homework properly. Then you might already have a rough idea of which flat rates can be used to estimate the costs of a house.
Roughly, the total amount and the resulting installment should fit your income, otherwise you won't be able to build later. But I think and hope you have already done that.
Plan for parental leave and possibly part-time work and daycare costs afterward, as you might face stronger financial setbacks in the worst case. It could also get tight.
What do you estimate for construction costs and monthly loan installment?

And otherwise yes, initially finance variably. It costs a bit more, but not the world either. Then later a big loan.

We roughly imagined it as follows (of course, we have not yet had any talks with architects or the like):

House:

150m² x €2000 rough guideline: €300,000
Garage €25,000
Garden €15,000
Kitchen €20,000

Total: €360,000

For the loan, we assume a monthly amount of €1000 - €1200.

The amounts are just estimates. Are the estimates okay?

We have also already thought about the wedding and parental leave. That's why we would like to keep the monthly amount within the above-mentioned range.

Not everything has to be done immediately and maybe instead of a garage there will be a carport, but you just don't know yet. You have to see what the financial framework allows.

Hello HausbauProjekt,

as far as the financing itself is concerned, I personally consider it feasible. Especially since 50 K€ of equity capital is available.

Regarding the purchase of the land and its financing, we were in the same situation. The city only said: "Now you can buy the land and make sure that the financing confirmation is submitted within 6 weeks."

Planning and financing the entire construction project within that time was simply not possible. Accordingly, we took out a variable loan, paid for the land, and then had time (until now...) to think about everything else.
In the meantime, the financing for the entire construction project, which replaces the variable loan, has been secured.

By the way, we obtained the latter from the DSL Bank, while some others were either not willing to grant a loan at all or were significantly more expensive.

Good luck to you!

Total: 360,000 €

+ Additional construction costs/ furnishings/ reserves or buffer?
I think the 50k is a bit tight for that.

However, you can offset this with what you can still earn in equity until the mortgage starts. Best to be conservative.