Build big? Or continue renting?

Hi sw1008,

I can also tell you how we do it. We're still in the middle of it, so not full pros yet ;-) I guess we're about your age and already have 4 kids, all still small. At the moment we rent 85sqm and get by fine. But we need something bigger, have searched a long time for something reasonable to rent, found nothing or if we did, didn’t get it. ("4 kids, help!"). Now we’re going to build, although our jobs are not set in stone forever yet, so a change is still planned. The job situation for us is good, so we dare to settle locally with the house. That huge loan amount you sign for first causes stomach aches. We did it like this too: in case of emergency, the higher earner’s salary has to be enough to cover living expenses and the loan. And that works, it should even get easier with the years. Even though, of course, the kids will get more expensive again. We are now building 7 rooms on just under 170sqm, at first we won’t need them all. So we have a few guest or work rooms to spare ;-) Actually, we wanted to do with fewer sqm, but none of the employed architects from a general contractor had a brilliant idea. And building with a freelance architect is much more expensive anyway. Although we are now of course buying external expertise for construction supervision etc., which the architect would have done otherwise. But we are satisfied. So far – we have only signed a planning contract, next week it gets serious. So, I got a bit carried away ;-) If I were you, I would build, start with low repayment and agree on special repayments. Then you’ll still be done before 20 years. Unless it ends up being 10 kids :-) Best regards, Mecc

Hello,

calculate a bit differently: In a few years you want to have 2 - 3 more children. So let's add 2 more children. You obviously wouldn’t be able to manage with your 72 sqm anymore.

According to the 2012 rent index, the average price for an approx. 120 sqm apartment in Cologne is €8.68. That would be over €1,000 for the landlord monthly, €12,000 per year.
So, that was the average price. Now you live in one of the most beautiful districts with a park and similar amenities nearby. If I take the highest price for a 120 sqm apartment (11.05 / sqm), you would pay about €1,326 / month, almost €16,000 to the landlord.

I recently heard on the radio that for new rentals the rent is sometimes already over 40% higher than the customary local rent: €1,326 + 40% = €1,800 (ok, worst case, but Cologne is definitely attractive).
Who knows how rents will continue to rise in 3 - 5 years.

Even for €320,000 you can get a good financing with a monthly burden of about €1,300 (we have that too!).

But: rents keep rising, the annuity of a loan stays the same.

My parents chose a financing in 1980 that cost them 900 DM at the time. Today they still pay €450 (refinancing in between – another topic) and have a big house. Own home, simply!

If you still have your parents' house in reserve, you can approach the matter even more relaxed.

Best regards

Julia

Thank you all for the contributions, the house building forum seems to me like a family gathering place where (future) large families are also welcome, thank you!

I think we are now applying for the plot, if we get the contract, we still have to sell my brother’s house to pay for the plot and then take out the loan.

How did you go about financing? Can I already make a non-binding inquiry? Where is best (financial broker, internet, house bank) or rather wait until the plot is there? Is it harmful if you inquire about a loan with the bank in advance?

I now also see the "repay more relaxed" approach, after your posts. It would be important to me that I can variably adjust the rate/repayment amount with a loan. Therefore, I see the loan for the first time rather in a different light – it is not something to get rid of quickly after construction, but rather something that belongs to the house building / property. Therefore, it should be chosen so that a certain financial leeway remains.

Are there actually things like penalty fees or a certain number of repayment adjustments that I can make max. with banks and then no more?

We first went to the house bank and were completely taken for a ride there. Everything was aimed at pushing us as many building savings contracts as possible. Fortunately, at some point I didn’t understand anything anymore and left. For the annuity loan, they only wanted to give us 15 years at 4% interest (we have nearly 50% equity). That was at the beginning of 2011. Afterwards, we went to an independent financial broker who asked the same bank with the same conditions on our behalf: his special terms got us just over 3% interest for 20 years. My account at the house bank has since been closed.

What we got after several requests: 20 years fixed 3.0% including KFW50 share 12 months interest-free provision period (very important) 10% special repayment right 5 times free repayment rate changes The bank is not allowed to sell the loan without our consent

Well, in 20 years I would also have to raise some pocket money to financially support my children during their studies and training - that's why.

Oops.... sorry, I don't know anyone, have never met anyone, who plans such a thing when the children are still small. Either you have something left over as parents later or not... Things like that just happen. Children are supposed to become independent themselves... financial injections shouldn't be taken for granted.
Well, since I just skimmed through these long threads here, I gathered that financing can be tight, so you have to decide what and when you can/want to offer the children. Nobody has to play Croesus, but I admit everyone their own attitude.
Personally, I would offer my children and, of course, myself (if there are arguments for it) a home of our own, for that the eternal student would have to get a job later ;)

Why is the interest-free disbursement period important?