Building a house financially feasible or a pipe dream?

I belong to the top 15% in Germany in terms of income with a net of €3,000. If I can't afford a new build, then where do all the new builds come from?

No one is saying that you can't afford a new build.

In 2017, I consider 138m² (that is a single-family house + basement with one dwelling unit & land for €90-100k) with €120k equity ambitious but definitely realistic.

I mean, who builds a shack for €650k and earns only €4,500 including child benefits. If you had €250k equity, no one here would raise a finger.

You have to tremble every month that the car doesn't break down.

For example, at the end of May I had one car service, additional utility costs, additional tax payment, and a car repair = approx. €2,500. That's not unrealistic, is it? What do you do then?

I am waiting to see what people from the banks think.

I have now realized that I underestimated the whole thing. I had calculated with €450,000, with €100,000 equity (from the house sale). That would definitely be doable. If it has to be €200,000 more, I don’t believe in it anymore...

As I already wrote in the initial post, I’m wavering between the 3 options. If new construction is off the table, I can only continue with the extension, which brings other problems.

The fact is, I need more space. Some circumstances can be changed, some just cannot.

I am glad that people here are giving me their assessments. But unfortunately, I am still not one bit closer to a solution.

However, you are welcome to discuss my extension plans (from the architect) in the floor plan forum – maybe we can come to a reasonable, financially much more relaxed, and livable solution there.

It's not about the total amount you have to take out as a loan, but rather about the monthly amount you have to pay. That is what's interesting. What does the bank require you to pay? So off to the bank!

Otherwise, yes, your parents' pension must be fully taken into account. After all, that is your joint "income." From that, the flat-rate amounts for the support of these 6 people are deducted. What remains is the amount you can theoretically finance.

Just take a look at floor plans. Is there a solution that you all like? Maybe even on a smaller space than expected? Then go to providers and discuss it. Then you'll really get an idea of what your project will cost.

Otherwise yes, your parents' pension must be fully taken into account. After all, that is your joint "income". From that, the flat rates for the support of these 6 persons are deducted. What remains is the amount you can theoretically finance.

I don't believe that. The parents are completely excluded with all income and all expenses if they do not appear in the loan agreement.

I don’t believe that. The parents are completely out of the picture with all income and all expenses if they do not appear in the loan contract.

I can’t imagine it either given the age of the parents. I wish everyone that their parents live a long time. But let’s be honest, until the age of 75 you are more or less free of complaints and reasonably agile and receive a pension. After that, it means care level 1-3 or the end (really very exaggerated).

Just telling the bank advisor that you don’t want to charge rent is the end of it.

I would really be happy (whether the bank’s decision is positive or negative) to read about the outcome of the conversation with the bank. Unfortunately, no one ever comes back and says how it went.

I don't think so. The parents are completely excluded from all income and all expenses unless they appear in the loan agreement.

I see it the same way. It's not the case with the current loans in the same situation.

Various banks said back then that you could possibly negotiate a 0.1% better interest rate if the parents are included - but then everywhere. Then it would be like Evolith wrote - their pensions would be counted as income, and a flat rate for their "household membership" would be counted as expenses. But that was a break-even calculation back then because they receive almost exactly the pension amount the bank estimated as a monthly flat rate. In reality, they don’t actually need the full pension - it’s still enough for vacations, a new car, etc., but banks calculate that very opaquely...

Also in our case - why the bank estimates 800€ monthly for my "existence," but only 200€ for every additional person in the household, I will never understand. Despite a household budget book kept continuously since 2008, most banks stick to their flat rates that are completely off reality...

But as I said: parents are not an issue when it comes to financing.