Building a bungalow. Can we finance it?

Hi forum,

my boyfriend (38) and I (28) would like to build a bungalow. So far, we have inquired about the costs at 2 construction companies. Unfortunately, we don't have our own plot of land and would have to buy one. The calculated costs (170,000 € house + 40,000-50,000 € land) were roughly the same at both companies. Now we are not exactly sure if we can afford this. Unfortunately, we have very little equity and would prefer to keep it as a reserve. For example, if I go on parental leave. Our net salaries are: boyfriend about 1750, me: 1600 then the insurances are deducted. I have about 1400 and my boyfriend 1550, so together we have about 3000. Without Christmas bonus, overtime, vacation pay.

Can someone tell me roughly how much we could finance and what we would have to pay per month?

Thanks for your help.

Tanne

First of all, I have bad news. The costs that were told to you are most likely not the total costs by far. If you were offered a turnkey? house, there will surely be an additional 20,000 - 40,000 in ancillary construction costs. Then you urgently need to check what is really included in the offered price. You also have to carefully check the quality of what is being offered; unfortunately, there are providers who offer cheap materials in the house and charge really nasty extra fees if you do not like the standard.

Then I assume from the price that you do not want to build a basement. This can easily cost between 30,000 and 50,000 or more. You will only know the final costs once you are finished. What is definitely helpful is to have a soil survey DONE BEFORE purchasing the plot. That costs a one-time fee between 600 and 1,500 €. But it can protect you from massive additional costs. For us, the extra costs are now almost 20,000 € just because of the plot. (But we knew that)

Now to the financial part, after I have probably already scared you a bit
You have 3,000 € monthly, which is not particularly favorable since you have no equity. With 1,000 € per month, you can finance about 250,000 €, which might only be just enough for you. But you actually need an amount between 250,000 and 300,000.
To the financing sum, about 300 € ancillary costs per house are added.

If you now fall out for a parental year, or if one of you loses their job, your financing will completely fail. Or at least be very seriously endangered.
I see it this way: a house financing should also always be manageable with just one salary in case of emergency.

I hope this helps you a little.

Hello Tanne.

How big should the bungalow be? With or without a basement?

If you want to build a bungalow without putting any equity into it, you will not exactly benefit from low construction interest rates. And taking out a loan of 250,000 is quite a statement with just under 3000 EUR net income. You can calculate for yourself when the loan will be paid off with a rate of 1000 EUR. Your friend will be retired by then. So you should reconsider and calculate carefully.