Building financing first offer

Hello,

we have found our desired plot of land and our desired house (Mecklenburg-Vorpommern). This is a new build of the house.
The total price (plot, incidental costs, house, etc.) is 272,000 Euros.

Now to our details:

Income:
Husband: 2,900 Euros net monthly income (civil servant)
Wife: 800 Euros net monthly income (employee)
2 children (4 and 9 years old) child benefit: 380 Euros

total: 4,080 Euros

Expenses:
Car loan installment: 320 Euros monthly until 2021 (purchased at the end of 2015)
no other loans or debts exist.

Equity: 17,000 Euros (some additional amount still available but kept as a buffer for unforeseen events)
financing requirement therefore 255,000 Euros

Desired rate for the construction financing: approx. 850.00 Euros

We have received our first financing offer. This offer includes a split into 3 financing components.

1st part 50,000 Euros (KFW 124 loan)
Nominal interest rate 1.35 %, repayment rate 2.82 %
Effective annual interest rate: 1.36 %

2nd part 100,000 Euros (repayable installment loan)
Nominal interest rate 1.94 %, repayment rate 2.00 %
Effective annual interest rate: 1.96 %
Fixed interest period 15 years

3rd part 105,000 Euros (loan with building savings contract)
Nominal interest rate 1.84 %, repayment rate --- %
Effective annual interest rate: 1.86 %
Fixed interest period 15 years
after 15 years the building savings contract will repay this installment loan. (effective annual interest rate for building savings loan 2.70 %)

We have another appointment at a different bank next week.

I would like to hear your opinion about the financing offer mentioned above.

Many thanks and have a nice rest of the weekend

Hello,

regardless of the financing offer, the house price seems extremely unrealistic to me. Surely the experts here can say more about this, but:

Land + tax about €60,000 (I read this number in another forum where you apparently started the same thread), leaving €212,000 for the house and additional costs... that can basically not be right, unless you put a 60sqm hut on the land.

In addition, ZERO equity (if I include the car), your buffer is tiny, expensive follow-up financing will definitely come your way if the banks even cooperate...

Even if it works out with 270k (which I also don't believe)..The income is not particularly good...plus a car financing. It all doesn't sound very good. Better: pay off the car and save up equity.

With a reasonable! income of €4K per month, a savings rate of €1K per month is a healthy amount. I have to disagree with our tycoon Steffen80 (if €4K is not special, you are very arrogant and should better refrain from commenting on income). It's a pity that you didn't manage to save up equity - but why not? Whether the house price is appropriate (garden, furniture, outdoor facilities, etc. also cost a decent amount of money) is another matter.

I actually meant it like this: "Income is not particularly significant without equity." I was a bit quick when writing that. 4k income and 30% equity -> thumbs up! 4k without equity I consider bad! and 4k is not special.. Inform yourself about the average income of home builders! But we have already had this discussion several times. We don't need to start it again..

The average income of the typical builder is certainly not above 4,000 euros net.