Build a house? Financial advisor says the land and financing are okay

About our situation. Couple 37/32 both employed. 1 child. Minimum monthly income including child benefit approx. €3500. No equity. House with land completely without additional costs €270,000 + property transfer tax + additional costs... so just under €300,000 loan amount. Ready for retirement... so roughly 30 or 35 years time. 2x €50k KfW loan 200,000 normal loan. The monthly installment should be around €1000/1200. The financial advisors say of course it is possible. However, I am rather skeptical and am looking for objective opinions on this plan.

1. The house will probably be more expensive than planned (Außenanlagen, painting, ggf. Sonderwünsche, moving costs, double burden rent/loan, etc.) 2. Loan amount in my opinion too high for the income (low repayment assumed in your calculation) = what happens if one income disappears (or even if only part of it disappears). Is the family planning completed? How long will the child benefit be paid?

3. Additional costs including property transfer tax are set too low at 30K. For example, we have 45K acquisition/construction incidental costs WITHOUT additional equipment. That is another 20K extra.

The house will certainly be more expensive than planned Nordanney is right. Assuming the family planning is complete - how secure are the jobs? You would have 2300 - 2500€/month to live on - all in. From this, all additional costs (energy etc.), reserves for the house, insurance (including EU or loss of earnings), retirement provision, savings plan for the child (how old? Children/education cost a lot of money), vacation, reserves for a new (down payment) car, telecommunications, etc. etc. must be taken out. Do you keep a household budget? In such a case, it is essential. In my opinion, the missing equity is the crucial point. At least in the sense that one should always have a certain amount in reserve for emergencies - mind you, not just for the actual house construction. For three people - how would a nice large condominium be as a possible alternative if it is to be property? Or a younger existing building?

As I said, I am also skeptical. What must also be mentioned is that there is still a house with land (built in '92) from the parents-in-law where my wife is definitely the sole heir. The house is located in a somewhat remote village. Just the right place for retirement. I believe one should save capital until retirement and refurbish this house instead of selling it and using the proceeds to pay off the remaining loan. It is definitely the safest method.

Nowadays, one must reckon that the house and property of the parents will finance their retirement. This means eventually selling this property and monthly costs for rent and care that will be paid from this sale. The same will happen with "our" houses.