Construction financing: What options do we have?

  • Erstellt am 2011-03-31 08:46:31

Bauexperte

2011-04-05 10:03:14
  • #1
Hello Karla,


Your uncertainty probably stems from the fact that you/your husband only get information from the internet? As a start, that’s always good, but if you want practical experience that is actually useful for you, you have to go to the "front" ;) Here in the forum and others, you will find statements about a wide variety of providers; choose a competitor from the positive comments and arrange a consultation appointment. During the conversation, further questions will arise from the statements made, which you can ask directly – I can well imagine that afterwards you will have a perspective for your further decisions.

The top priority, however, is the question of financing; Ille 1975 has written you practical information about this. No matter what decision you make, it is always good to know what you “can” finance, because then you decide in the concrete case what you “want” to finance. This consultation with an independent financier of your choice will also advance you a good deal in terms of security. From my experience, I know that it should not be the last percentage point of financing that makes the difference, but the alignment with your personal situation, possibly tax aspects, and the amount that must be paid monthly in the end - without reaching the edge of what is feasible.


This assumption is also correct, however, a new build is not “low in ancillary costs,” although – if you compare all options to be considered – the new build clearly has the edge, not only because you can call a new house built according to current technical regulations your own after completion.

An existing property – as long as it is still relatively young – is only inexpensive if you can purchase it from an auction; there is a human fate behind it, which you can use to your advantage. The investment range you mentioned will, however, provide you with a used property in the range of 15-20 years or older, depending on location and plot size. It goes without saying that – besides the usual renovation costs – further renovation measures will be due; most homeowners have not built up reserves to tackle pending renovation measures. Even if you ostensibly have to pay fewer fees with an existing property – only real estate transfer tax, notary, and court costs – the renovation costs can far exceed the ancillary costs of a new build. In this context a tip: do not buy an existing property without an appraisal; if in doubt, have one made yourself if you have fallen in love with a house. It is money well spent!


The problem is not your income or your situation, as far as you have described it here. You are just – as many builders do at the start of their search, so normal – working from wrong parameters. Some users have already told you that you will not be able to realize a building project with the capital you want to use; unless you move with your family to the countryside where plots are traded in the range of EUR 30-40 thousand.

To stabilize your self-confidence, take the really good advice from Ille 1975 and clarify your financial possibilities. You will find that you will then look at the wide world of financing with different eyes, possibly even be willing/able to put a little more money into it without sacrificing precious quality of life.

Best regards
 

ille1975

2011-04-05 12:18:57
  • #2
Hello Karla,

when I said that a nice little house is possible for 250,000.00, I was basing it on my own construction project. As the construction expert described, I had to go to the "countryside" for that. There the land was about 90/sqm. In the big city/my place of work, the land prices are around 230-300 per sqm. We built without a basement, gave up on frills (bay windows and so on), but placed value on energy saving. Your family will face some compromises that you should discuss intensively. We are saving the second car, I use public transportation and need 35-40 minutes to get to work. I save on the parking space, gasoline, etc. and get to work for 50.00 per month. In return, we have a small energy-saving house in a new development area with many families. I see my daughter about an hour less per day. When there is a lot to do, she might even already be in bed. My wife can afford the house with her salary as a childcare worker, should I be unable to. And this country certainly needs childcare workers far more urgently than bankers. If we feel like it, we can repay until the doctor comes, build up reserves and, if we ever really swim in money, even add an extension to the little house. In the city, I would certainly have been able to finance the house, but my wife would not have been able to afford it. Financing a house in the city with a basement, if at all, would have become very expensive. And it probably would have given me restless nights for the next 25 years. As a civil servant with 2,900.00 net, you almost have a "luxury problem." Your wishes sound very well thought-out and considered so far. As long as your family has agreed on a house, you have found a construction company you trust, and financing that lets you sleep peacefully, your construction project is practically airtight.

Best regards
Ille1975
 

Karla

2011-05-01 22:27:55
  • #3
Hello!

First of all, thank you for your answers.
In the meantime, a completely different option has arisen for us, so we are now initially considering a purchase of existing stock.
I now also have some questions and am looking for the right place here in the forum to ask them.

Regards,
Karla
 

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