Construction loan from the bank for house building without equity?

  • Erstellt am 2013-01-04 13:55:15

Mel1980

2013-01-06 19:21:51
  • #1
Sorry. I have always calculated with the fixed costs. So with 900,- EUR warm rent.

As already described, we currently have 2100,- EUR left for living expenses. And I find that quite a lot. Only now can we start saving. The question is, wouldn't it be better to pay off a loan right away rather than building up equity for years? I mean, I understand that we won't buy anything immediately tomorrow. But maybe in 1-2 years?
 

Snow57

2013-01-06 20:07:37
  • #2
First, I would sit down together to determine the costs needed each month. Living expenses such as phone, groceries, clothing, leisure, car, etc.

If necessary, it can sometimes help to document this over a certain period of time in order to have an accurate overview.

In addition, there are the ongoing fixed costs.

Occasionally going out to eat with the family, going on vacation... all of these are things that, in my opinion, should be included in the calculation.

Furthermore, it must be taken into account that reserves need to be built up, which, as I think, should not be too low. Here, I consider a monthly amount of at least 250-300 euros essential.

There is always a certain risk, but I think it can be made calculable.
 

Micha&Dany

2013-01-06 20:31:39
  • #3
Hello Mel,



No, you are only allowed to calculate the cold rent (the banks do it the same way), since you will still have additional costs. And if you increase your living space (which is usually the case when moving from a rented apartment to a house), you tend to have higher additional costs than before!



I can understand your reasoning very well. I am still a few years farther from 40 than your husband and we had a little equity (even if it wasn’t much), but we manage with around 1200 euros for our house – with a term of about 32 years.
Our consideration was also – with the interest rates, waiting 1-2 more years to save more equity could be the wrong decision. Keep paying rent, or better build right away? We decided to build. Because if it doesn’t work now, it certainly won’t work in 2-3 years if interest rates rise.

As our financial advisor said so aptly in the first discussions: He can’t promise us that we can afford *that* house (like we envision it), but we can afford *a* house.
That’s how it went: We had to make some compromises with a heavy heart, but at the moment we are building.

Conclusion:
Our starting position was a bit better than yours – but also not as stable as some others. We took the risk and built.
Whether everything really goes as we currently imagine it, or if it will go wrong?!?!
Ask me again in a few years – then I can answer you. (But I assume everything will go according to plan – otherwise I wouldn’t have done it :rolleyes:)

By the way:
Just looking for houses / building plots initially costs nothing – except some time :p
As long as you don’t sign anything, everything is completely non-binding!
Look at used houses, show homes (model house parks), talk to construction companies, etc. This will give you a feeling for "what a house costs" – and what your dreams and ideas would cost.
If you also talk to 2-3 banks / financial advisors in parallel, you get a feeling for what you can afford and when.
And then you can still decide whether your dream is feasible – or will burst.
As I said – as long as you haven’t signed anything yet, everything is completely non-binding!

Best regards
Micha :cool:
 

Mel1980

2013-01-06 21:20:47
  • #4
For five years, I have been keeping a household budget in which every debit from the account is documented. Therefore, we already know what we actually have available. We have also been able to go on vacation and treat ourselves occasionally.

@Micha:
Thank you for your detailed explanation. Very reassuring. And just as you describe it, that is what we are doing right now. Watching the market.
We just haven’t seen any advisors yet. That will be the next step. And of course, saving :o)
I think we are probably on the right track. Even if somewhat late, but at least. And whether it will be a new build or an existing little house... we’ll see.

Thanks to everyone who took the time to respond here. Great!

Best regards,

Mel
 

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