Construction financing: What options do we have?

Hello.

It always depends on how much own effort you can provide.
So whether painting, tiling or insulating, you can save a lot there, you need to know what you can contribute.

Best regards, MR.N

Hello Karla,

Due to my job-related paranoia, I am unsure whether I can manage a new build with these conditions. Although my house bank would like to finance €250,000 for us, I am not sure whether this offer isn’t exaggerated due to commissions and my profession. Therefore, I would like to spend less and have settled on a total sum of around €200,000. We have already given up on our wishes because the quality of our home is more important to us than fashionable frills.

Due to my job-related paranoia :D I want to strongly recommend that you use independent financial advice alongside your house bank. It will cost you about 2–3 hours of your time but in my experience is more effective and targeted than any bank meeting. Since you have indicated NRW in your profile, I can gladly provide you with a competent contact person – and no, I do not receive any commission :)

We want a house without frills (meaning: no bay windows, no unusual eaves, initially no carport/garage, also a cellar will not be possible within our budget), I am thinking of about 120–130 sqm, pitched roof (possibly without eaves to have a bit of modernity) on a rather small plot from 350 sqm. It would be nice to keep ancillary costs low through energy-efficient building since I could then put more into the repayment and possibly increase our budget.

For better understanding, I will use an example from my job: a small house, around 126 sqm with a pitched roof (PR) 45°, will cost you about €153,000 on a slab without painter & carpet flooring. Since you must build without a basement (BS) at your target budget, a steeper roof pitch (RP) is advisable because you then have enough storage space in the attic – Christmas ornaments and so on have to be stored somewhere :). You still have to add about €4,500 for decentralized ventilation (this is the cheapest option) to the stated price, then you are – combined with a gas condensing boiler - at KfW 70. This value can also be reached/increased by heat pump technology but that would go beyond this thread and your budget would be stretched even more than it will be anyway.

Assuming the above KfW 70 values, the following calculation results: house costs KfW 70 €157,500 + ancillary building costs €30,000 – then, with your targeted budget, the plot could still cost €12,500. There are indeed some places in NRW where there are still cheap plots (plot), but whether they will actually be that inexpensive, I doubt. With own labor (OL) you can of course reduce the house price – but you should not forget that you/your husband are probably absolute amateurs and have to manage this house project in your free time. If you calculate the “painter & carpet” part alone, for the painting work of the above example, the floor area times 3.5 already adds up, so – with assumed 68 sqm per floor – 238 sqm wall surface to paint or wallpaper + another approx. 105 sqm floor area (minus hallway and bathroom). Now you can calculate for yourself how much time every additional OL would cost you – apart from the fact that the saving through OL does not actually correspond to the credit stated on paper; you have to buy the materials one way or another.

How expensive can a good house be with our budget?

Realistically and excluding painter & carpet of the above value + reserve for the odd extra + ancillary costs + land costs.

In financing matters others will be able to give you good answers here.

Kind regards

Hello! Thanks for your answers.

We are already planning to do some work ourselves - however, we are not delusional and are considering laying plumbing and electrical lines ourselves. :o))

I think we will rather take care of the finishing work like plastering walls (we don't like wallpaper!), laying floors, tiling, and also insulating the roof if this is not included in the house price. But there will hardly be any savings here, right?

Basically, we are considering a prefab house. I would basically have liked a water-bearing tiled stove with connection to the underfloor heating, but I assume that this type of heating will exceed our budget.

Construction expert, I look forward to a PM from your financial advisor!

And I would also be very happy if one of the financial experts could answer my questions.

Best regards from the way too small apartment, Karla

Hello Karla,

I think we will rather take care of the finishing work like plastering walls (we don’t like wallpaper!), laying floors, tiling, and also insulating the roof if this is not included in the house price. But there will hardly be any savings here, right?

That depends :)

For earthworks - as long as they are not included in the fixed price anyway - in my opinion you can only save if you have good contacts with a civil engineer, or for example dig the trench for the sewer connection yourself from the handover point of your property to the house. Regarding roof insulation, I think you are mistaken - many man-hours go into this, and if you trust yourselves - this trade also includes drywall work (plasterboard), savings in the four-figure range are possible. However, again here: you have to deduct the material from the credit.

Basically we are considering a prefabricated house.

Prefabricated in the sense of "everything from a single source" or prefabricated in the sense of a classical prefab house?

I would basically also like a water-bearing tiled stove connected to the underfloor heating, but I assume this type of heating will blow our budget.

Even if I get "beaten up" again by the forum, why do you want to incur this financial effort that, in the end, hardly brings you any significant savings?

Kind regards

For the earthworks - as far as they are not included in the fixed price anyway - in my opinion you can only save if you have good contacts with a civil engineer, or for example dig the trench for the sewer connection yourself from the handover point of your property to the house. I think you are underestimating the roof insulation - many man-hours go into it and if you trust yourselves - drywall work (plasterboard) also belongs to this trade - a saving in the four-figure range is possible. However, here again: you have to deduct the material from the credit.

No, I think we don't know enough people for civil engineering work. And thank you for pointing out the misjudgment regarding the roof insulation. I think many would-be builders fall for overestimation...

Finished in the sense of "all from one source" or finished in the sense of a classic prefab house?

In the sense of a classic prefab house. However, "all from one source" should not be underestimated either. I can very well imagine that regarding some trades, I don't have the necessary foresight - what I need, when, for how much money. I would rather leave that to the experts.

An acquaintance built a prefab solid house, bought the shell, and awarded all the trades. In the end, it was - with all due respect - damn expensive. Much more expensive than the turnkey version would have been.

Even if I get "hit" again from the forum, why do you want to undertake this financial effort that hardly brings you any significant savings in the end?

:D :D :D Honestly: biomass energy doesn't work, it takes too long for something like that to pay off - so the most sensible option would still be the gas connection?

Hello Karla,

Building a detached single-family house on 350 m2 will be very tight, you should rather aim for 450 - 500 m2.

Even if this would work, the budget won't be enough.

€200,000 minus:

Plot 350 x €140 = €49,000
Taxes and notary €3,000
Additional costs approx. €20,000
Base plate with earthworks approx. €15,000

leaves €113,000 for the ready-to-move-in house, without kitchen, without special requests, without outdoor facilities, without garage, without surcharges, etc.