Assessment of financing scope with 4620 euros net

Hello everyone!

A new development area is currently being developed in our town. Since we have relatively good chances here due to the social criteria, we are considering applying here. The plot price is 400€/m2, and the plots range between 450-600m2.

Since we are uncertain, we wanted to ask for a thorough assessment of whether it would even be possible with our criteria.

We actually wanted to spend the little equity on the kitchen, furniture, and decoration. A single-family house with a basement is planned.


### General information about you

How old are you? Sandra 34, Simon 36, married
Do you have children? 17 years old (not Simon's)
Are more children planned? Second one comes in June
What do you do professionally? Medical assistant, designer
Are you employed? Yes
How many hours do you work? 40h


### Income and asset situation

What income do you have (net)? She: 1960€, He: 2670€
How much child benefit do you receive? 219€
How much equity do you have? 20k€
How much equity do you want to invest in the house project? 0€


### Expense situation
(According to Finanzguru a total of 1280€)

Housing costs:
Current cold rent: 570€
Current warm rent: 700€
Electricity: 68€
Phone, internet, mobile: 55€


Mobility costs:
(Calculated per month for both cars (two))
Monthly ticket for bus and train: 40€
Car loan: 175€
Car insurance: 74€
Taxes: 26€
Fuel: 80€


### Other

Insurances:
Liability insurance: 6.70€


### Income and expense totals

Total income: 4849€
Total expenses: 1280€

There are quite a few things missing from the expense list. In short, and without knowing what kind of house, I see, in the best case scenario, construction costs of 400,000 including ancillary building costs plus 240,000 for the land. That makes at least 660,000 total costs. No equity. Child on the way, net income is not enough. And as already said... all in the best case. Better to first finance only the land and save up more equity.

I can only repeat, some expenses are missing ... and then the question, over what period did the €20k accumulate? Just asking because of current living and saving circumstances. How is parental leave planned with the new child? And how is work supposed to continue after parental leave?

Sorry, but I don't really see that. You will probably eat something too, right? ;) And you also have expenses for daily life. Plus a car financing and hardly any equity. In connection with the land prices, that really, really gets tricky. I definitely don't see a basement. 550m² at 400€ each makes 220k + additional purchase costs. I’m not very familiar with that, so about 250k. Then the house with 150m² at 2700€ each makes 405k. Adding additional construction costs and other expenses, you quickly get to a total volume of 750 to 800k€. 100% financing with 2.5% initial repayment at 1.5% interest rate (no idea if realistic, it’s just an approximate representation, but it should fit) results in a monthly burden for the construction financing of 2500€ PER month. No basement. Repayment not particularly high, etc. I would advise against it.

Everything very sobering :) Nevertheless, I will still provide a few missing details:

Living expenses:

[*]Groceries: 350€
[*]Restaurant costs: 45€
[*]Personal care/Drugstore: 30€
[*]Pets: 30€
[*]Clothing: 20€
[*]Spotify: 2.50€
[*]Miscellaneous: 20€

Total income: 4849€ Total expenses: 1280€

With the 3.5k monthly surplus, you have saved your equity over the past six months if your calculation is correct. Then the big question is what you did before that. Otherwise, a rule of thumb is that for every 100k loan, a 400€ payment is due. Since you will hardly get below a 600k budget with the land price, that is 2400€ or 50% of your total income. Plus additional costs. That would be way too high for me.