Construction financing - what can we afford?

I find it bizarre when more money is spent on cars than on food. Basically, with similar incomes, the expenses with 2 children are quite different here, just clothing, eating at school, the new bike, about 6 or more pairs of shoes per child at 60-80€ each, etc. Vacations also don’t get cheaper when you are tied to school holidays—and we go camping. Still, an ice cream here, a trip to the zoo once with grandma and grandpa together costs 120€ admission alone in Hamburg... I would look for a payment of 1500€ and a plot of land that is easier to build on—maybe a few more months of patience—then a house project that only costs 500,000€ and you can enjoy the ease of life. Especially with children, you might simply not want to work full-time in order to enjoy the time.

I agree with Mo Nique. The cost of living with children will change significantly. We do not need to start discussions again, as every family incurs different expenses. At the latest from sports clubs and the end of primary school, expenses increase again. For me, it is still too tight. But I would like to know how you want to achieve [KFW 55]. My tip: Get comprehensive advice and first put the house together. You have time. Don’t let yourself be pressured. And from personal experience, I can say that difficult plots of land are not very refreshing afterwards! I have the impression that you are in a hurry.

Indeed, the property is reserved until 30.06 and would be a dream because of the described advantages regarding location/infrastructure/proximity to the grandparents. KfW 55 would be easily achievable with these 700,000€ according to the architect. For the time being, we have to trust the man and wait for the design and advice from the energy consultant.

Initially, we have 1100€ available just for the children (and food and drink are already covered) and the financing of two cars (which, by the way, would be paid off after about 5 years). With the 1100€ buffer, we still believe we are living large for a 700,000€ project. If necessary, we could well increase this amount to 1500€, of course combined with corresponding renunciation of pocket money, expensive brand products, etc.

Our repayment plan foresees repaying the KfW loan first, which would free up an additional 350€ after a little more than 10 years... plus salary increases of the next two performance levels (+ approx. 450€ + approximately 1.5% per year).

When leaving kindergarten, another 700€ will be added, as the childcare costs will then disappear.

So a few years after starting elementary school, we would have 2600€ - 3000€ available just for the children. Even if we then set aside 500€ monthly for special repayments + the 4000€ tax refund, 2000€ - 2500€ remain. Each year the financial burden decreases, the second of three loans will be paid off and again about 250€ more will be available.

Shouldn't such an amount be sufficient? I really don't want to make myself feel better at all costs, but shouldn't this be feasible? Am I making a serious mistake here?

Presumably, I just somehow don’t have a good feeling when such a plain single-family house drifts into that price range. Honestly, I don’t know where you want to build, but that will never have that value, right? You need to know that. I just wonder why, with that income and supposedly such a spartan lifestyle, there is only 25k€ of equity so far. And even if loans are paid off after 10 years, by then things like heating, household appliances, and cars will need to be replaced. So I don’t believe that as long as you are paying off and then children come along, the available money will suddenly increase – people get used to having more money quickly and then spend more. Lay out your cards as to what the priorities are, including what happens if [Trennungsfall] occurs. The decision has to suit you.

If you believe it fits financially, you should continue to pursue your wish. I wish you much success.

In fact, the property is reserved until 06/30 and would be a dream due to the described advantages regarding location/infrastructure/proximity to the grandparents.

Reservations can generally be extended if planning, e.g. creditworthiness, takes a little longer. Just ask.

Our repayment plan provides to first repay the KfW loan, which would free up another €350 after a little more than 10 years...

In general, you put the repayment into the loan that is the most expensive, so not the KfW loan.

I probably just have no good feeling when such a plain single-family house drifts into such price regions.

Me too. I don’t understand putting everything into the new build so that the rest of life has to be calculated. Although I – I think this is the right thread I have in mind right now – believe that enough buffer is calculated.