Construction project, what can we afford?

Hello,

we are planning our own construction project for 2021. A plot of land is already in our possession (approx. 800 sqm, €70,000 including additional costs). The plot + €20,000 is our equity. Furniture owned.

Net income for me is about €2,400, for her from November 2020 €2,300, from 2024/25/26 €1,500 (50%) due to starting a family (2 children planned). Secure jobs, both permanent, both TVÖD, increases only with experience level.

We are both 25 years old. The goal is to have the house finished, then work for 3/4 years to build a small financial cushion, then the children should come. With salary increases and her half position we would probably have at least €4,200 net. Otherwise, we have no debts.

We don’t pay much rent (~€400 warm). Her trainee salary goes for travel and maintenance, whereby I also spend a good €200 every month. We also occasionally buy small things here and there, but have about €800 left monthly. It can also be more sometimes, we don’t look that closely (yet).

Now the question is, how much can we afford? Offers go up to approx. €320,000 for 3 gables and dormer at the back, 160 m², turnkey with garage. We would probably have to take out €350,000 for such a project. Is that feasible?

Of course, we have already calculated a few loan examples. Will €1,300 per month be too much? It also depends on the lifestyle, but the fancy Mercedes is not parked in front of the door, rather two bicycles. We are not really vacationers either.

But I would like to hear your opinion! How much would you borrow in our situation? I have already read many examples here in the forum, and they were very helpful. But the absolutely perfect example is still somehow missing.

Looking forward to your answers!

Regards

Insurance salesman in public transport? And then such a good starting salary at 25? Wow, where can you find something like that?

oh, that someone checks that in the profile
I admit, I lied a little. Both are employed under [tvöd], but it has nothing to do with administration or anything like that.

Hello, as of now you will not receive financing for +/- 310k with your income. That means waiting until your girlfriend works full-time. I can’t say anything about the construction prices, but they will certainly increase. Is the plot saved up or gifted? If you have children, it will certainly be tight with a burden of 1800-2000 (including house incidental costs). That means practicing restraint.

The equity should be fine. I would still save and later set the installment to a max of €1000 (loan amount max €300K).

I think that if you tackle the matter as soon as your girlfriend earns regularly, everything will go very smoothly. With the income then available and 100k€ equity ([Grundstück], 20k€ and another 10k€ saved by then), you are in a good position. And I also find it sensible to build up some reserves before starting a family. So go for it!

However, in two years you will probably no longer be able to manage with 350k€ for a 160m² house, or it will no longer be enough for additional building costs, landscaping, etc. I would rather calculate with 400k€ for the project. That is also doable, but it is starting to become tight.