Construction financing in 2-3 years, how to prepare?

Hello everyone.

It is still a bit early, but maybe someone can already give us a few tips or answer the open questions.

We want to build a house in 2, maybe even 3 years.

For this, we have simply estimated 200,000 - 220,000 € including the land.

Is that even realistic? We don’t want a luxury build or anything like that. 130 m² and a bit of garden is enough.

How could we financially prepare well already now? Saving, saving, saving, is clear.

Currently, we have about 17,000 € equity, which grows by 800 - 1000 € per month.
That means in 2 years (if nothing comes up) that would be just under 40,000 € equity.

Net income is about 2,600 € per month.

Is building a house even conceivable in 2 years with that?

EDIT: Additionally, there are 2 building savings contracts, one runs until 2011 and the other until 2013.

Hello Wadi1982,

what you are currently doing there is already an excellent preparation for the planned property purchase in the future.

You now have a practice period, so to speak, in which you can well test how you can manage with a correspondingly high monthly rate and that without compulsion.

Because if you now add your rent and the voluntary savings contributions and can manage with this monthly rate, you can later also use this amount well for your mortgage financing.

Incidentally, you are building up corresponding equity and thus reducing the amount to be financed.

As a result, you can possibly increase your repayment portion later again and thus get out of debt faster.

With a planned financing volume of 180,000 EUR, you are currently at your monthly rate of approximately 750 EUR (incl. 1% repayment).

Although I cannot tell you how interest rates and property prices will develop in the coming years, in any case, you are already creating good conditions for your planned property purchase.

I wish you all the best for that.

Best regards

M. Thiemann

Hello Mr. Thiemann.

Thank you very much for confirming that we are on the right track.

Of course, one cannot predict the interest / price development for the next 2 years, I understand that.

In any case, you have already helped us a lot with the assessment of the installments (750 € / month for 180,000 €).

Currently, the following question is still interesting for me.

A few years ago, a "finished" building savings contract was used to finance a car. Here I pay back a relatively small installment monthly.
What would make more sense for the later negotiations?

a: To pay off the car loan completely now and then enter the negotiations with less equity, but without already having a loan on the side

or

b: To keep the loan running and enter the negotiations with more equity, but also with the old loan on the side.

I hope it is clear what I mean ;-)

Hello Wadi1982,

yes, I understand what you mean.

I don’t know how high the rate for the [Bauspardarlehen] is or how long the remaining term currently is, but you can still make this decision later when it is about to start. [Bauspardarlehen] can be repaid early at any time.

I wouldn’t worry about that any further at the moment.

What ultimately will be cheaper (less equity for the property financing also means higher financing – and that will certainly last longer than the remaining [Bauspardarlehen]) – only the future will show and it depends on the exact factors.

But as I already said: You can decide that later as well.

Best regards

M. Thiemann

OK. Thank you!

Hello Michael,

what do your fully developed plots cost per m2?