Assessment of Financing New Construction 425k € / Overall Financial Situation

We are also financing 380k with one salary. However, there are still 80k in reserve which are tied up and will be paid off early later. My wife, almost freshly finished with her studies (teaching degree), is pregnant and still has to do the preparatory service. However, my net income without the 13.3th salary amounts to about 4.2K. We also wanted to build, but with these amounts it became an apartment with 4 rooms, which can be rented out later and then we can build. A house was also our dream, but it doesn't make sense if you have to struggle for money every month. I find rent to be wasted money and it was almost impossible to get something here. Therefore, we moved directly from the parents’ granny flat into the condominium. Taking an intermediate step is not a problem. Also, it’s not nice to watch every cent; it got tight for us 1-2 months because many extras were underestimated, which is really unpleasant.

Key data: Our repayment rate is 1100€ and a lot is done through special repayments.

Thanks for your assessment.
I think definitions of lifestyle might often differ here as well. That’s why it’s always somehow difficult to interpret without a cost overview.
When you write that you have 4,200 € available, pay 1,100 € annuity, and it’s partly already tight without a child – then I just can’t relate to that. This really has nothing to do with creative accounting, but personal experience.

As I said, we have 4,400 € available. We temporarily had a variable loan as a “bridge” for the land and paid a monthly rate of 850 € – besides the 500 € burden for the cold rent we could still put aside 550 € every month without restrictions or special frugality, sometimes more, sometimes less.

That’s how things sometimes differ …

Nevertheless, of course I understand the points raised here and I do realize that 425k is simply way too much for us.

No, "it's going to be tight" was not meant because of consumption but because of building materials. An example: different wooden floor suddenly a 4k surcharge, terrace no concrete slabs but fine stone set in concrete 1800€ surcharge. Kitchen 20K KNX 15K, we had to buy all furniture completely new at the outlet. But that was also 5-6 K + used sofa 1.2K. Different shower head + thermostat because it's difficult to change later 1K. Also a big item lighting, because you have to search a long time, you don't just slap in spots anymore. Although I planned, searched, and installed the lighting myself, at least 2000€ went into it as well. You see, it’s the extras, we’re only talking about a 114sqm apartment here. None of these things were considered in the financing, so they were paid directly. So it’s clear that it will be a bit tight for 2-3 months. Even if you say you don’t need all that, the temptation is big because later some things can’t be changed anymore like KNX.

Our lifestyle is still more like in student times, no cinema, hardly eating out, etc…

Besides, the woman stays professionally on the ball instead of disappearing forever into oblivion (for the employer).

I already realize that 425k is simply way too much for us.

Read my post above. From my point of view, the 425k is not the real problem.

I need to reflect again and define a financing limit. We need to see if something is possible on the plot for, let's just say, 375k without kitchen and landscaping and with considerable own contribution, as planned 30k. I will discuss this with the architect. But I think 50k less volume would already give us more breathing room, even if that is still not little of course. But definitely doable.

Plan A now is to shrink the whole construct to 140 sqm of living space. As planned, just about one meter less on each side. Plan B is to eliminate the upper floor, moving sleeping + bathroom + technical room to the basement. The architect could work some magic on this and we would have to see if we can identify with it. Plan C, the worst case scenario, is to give up the plot again and come out of it with -15k €. Super frustrating, but we would still survive it and maybe try again in 10 years. But I rather fear that the house building topic would be buried forever for us. But well—better than ruining ourselves.

Can you market the property yourselves, or does it have to be returned to the original seller?

That would be nice. But unfortunately, it is a municipal property.

Land acquisition, notary, and costs for the architectural plans would then just be lost.