Compare construction financing offers - Which one is realistic?

Even if your salary is borderline for the amount. What kills a healthy financing is the lack of equity.

A healthy financing would be at least 3% repayment and 25-30 years fixed interest rate with the salary and nothing else. If you calculate this, you will notice that your household income is not sufficient for the amount.

Sorry that is more than just utopian. The entire financing is simply crazy and I hardly believe that a bank is allowed to legally carry out such financing. What speaks against building cheaper and simpler and maybe at least saving 50,000? Then you can build in about three years.

Hello!

About us:

Net income of €5435, 2 adults, 2 children.

We want to build in BB, including land, house, ancillary costs, etc. we need a net loan of approx. €564,000. Since we have no equity, an equity loan will definitely be added. Now we have two offers:

1. Equity loan (€60,000) with 5.89%

Main loan (€454,000) with 1.99% nominal interest and 2% repayment

KfW home ownership (€50,000) with 1.65%. All for 10 years

2. Equity loan (€50,000) with 6.3% for 10 years

Main loan (€513,000) with 2.84% for 20 years with 1.5% repayment.

Both have a monthly burden of about €2200.

The equity loan should be paid off after 8 years with special repayments (realistic, due to bonuses and special payments), so that then only a rate of about €1800 remains.

What do you think about the offers? They are from two different advisors. Both approach the matter completely differently and we are a little overwhelmed.

Best regards!

25 years in the company. That means you are 45. By retirement, you will still have a remaining debt of €250,000.

No bank will accept that.

How do you want to cover your retirement gap? There will no longer be €5600 net on your pension statement.

So first of all: €5600 net is not little. That is already a good family income. But the others are right. The amount you wanted to finance is too high for your income. My concerns: - The children will get older and then there will be no child benefits and maintenance payments anymore. That can create a hefty gap in the family budget. At that time, however, you will still be deep in debt repayment. - Your husband is in a managerial position. Especially these positions do not shine with security. And he provides a large part of your income. - Special repayments: Assume that in the first years you will not make any special repayments, as simply too much comes up with the new house. In addition, no bank in the world positively counts special payments and bonuses towards the salary. These items are simply too variable. You should not count on them as fixed. - With that amount, it will take you very long to pay off. You are aware of that? Why do you want to build yourself a €550k house? If the plot causes this madness price, I would leave it and look for another one. For €300k nice houses can be built (including ancillary costs). Then €150k for the plot and you are working with completely different conditions.

About us. He has been with the company for 25 years, now in a management position.
She: permanent disability pension of €1160 + child benefit and alimony.

In the second option, we would be done (with the extra repayments we want to make) after about 30 years.

If he has been with the company for 25 years, he will be at least 70 at the end of the financing period. Do you really want to still be paying off a house in retirement? You already receive a pension, which means your income will never increase significantly.

I am somewhat more relaxed about financing than some here.
For example, we are financing almost entirely without equity. We have slightly less income. However, we have no children, and our house costs "only" €220,000. We have a full repayment loan and pay exactly €980 monthly for 28 years, with the option of annual extra repayments of 10%.
€220,000 compared to €560,000! I would never have fully financed €560,000. Especially not with someone who retired early. In your case, unfortunately, I see it pessimistically as an exception.

If he has been with the company for 25 years, he must be at least 70 when the financing ends. Do you really want to be paying off a house in retirement age? You are already receiving a pension, meaning your income will never significantly increase.

Personally, I would have no problem taking out financing that I would still be paying off at 70. At 70, I want to live in a small cozy rental apartment with a terrace/small garden/balcony and "spend" the money from the house sale. Let landlords and management take care of the maintenance and upkeep of the apartment or the rental building. I don’t want to deal with or pay for that anymore then.