Equity for house construction – how realistic? Experiences

Hi,

my girlfriend (28, employee) and I, 31 (partner and authorized signatory in a well-running family business that has existed since 1988) are currently planning to build a house in northern Germany.

Our financial situation currently looks as follows:

Equity: €120,000 (this includes €50,000 gifted by my parents for the house construction)

Net salary her: €1,780
Net salary me: €2,630 with company car minus €380 private health insurance
Net total: €4,030

My girlfriend bought a condominium about 8 years ago and is still paying it off.
Purchase price: €87,000
Remaining amount: €59,000

We currently save together about €1,400 per month (her: €300, me: €1,100) (all costs for groceries, insurance, vacation, car, apartment, etc. are already deducted)
I do not plan any profit distribution, possibly as a special repayment.

We kept a household budget for several years, so we can estimate our expenses quite well.

1-2 children are planned, but only in 2-3 years.

Now we want to build our dream house in the countryside.

The plot of land is almost decided on (1200 m² for €35,000). Since it is somewhat remote in the countryside, it is this cheap. There are no additional development costs, only a sewage treatment plant.

We have budgeted the following costs:

€250,000-300,000 house (approx. 180 m² gabled roof house, we want to build without a basement, no excessive luxury, but also no cheap kitchen, etc., little personal work can be contributed due to lack of time)
€50,000 ancillary construction costs
Double garage €15,000-25,000?
Total costs therefore: €350,000 - 410,000

The garden will be gradually and cheaply landscaped by ourselves after the construction.
We want to get offers for the house construction soon. Construction is to start in spring 2016.

The plot slopes slightly to the back. I do not know whether this might cause increased costs.

Now, like many others, I have the question whether you would consider our project feasible or if you see any problems?

Thank you in advance for the advice.

what should happen with the condominium? Is it possible to get out of the financing to pay it off? Otherwise, 400,000 - 120,000 equity = normal financing costs of about 1100€ per month over 25 years. With a household net income of 4000 euros, that should not be a big problem.

We would like to keep the apartment and rent it out after we move out. The financing of the apartment is through DSL-Bank (25,000 € of which through Kfw) at 4.95%. Unless I have overlooked something, early repayment is only possible at the end of the fixed interest period. That would be in October 2017. I also thought that the home financing should not be a problem, but I would like to hear other opinions.

Calculated differently: + 400,000 euros house + 87,000 euros apartment (assumption, it's already 8 years ago) - 120,000 euros equity - 28,000 euros already repaid on the apartment ------------ 339,000 euros liabilities An annuity of 5% means 1,413 euros/month, which is roughly your saving rate. I see it quite relaxed, if I haven't miscalculated. Can you adjust the repayment for the loan on the apartment? You save 1,400 euros/month (Tagesgeld? 0.x % p.a. interest?) and have a loan with 4.95% p.a. Anything you can pay in there will yield a big fat risk-free tax-free return ... ;-)

That sounds very good to you. We could still change the repayment twice up to 10% (currently 1%).

Yes, then go ahead, change the repayment! As much as possible taking into account the 120,000 euros. The debt-free apartment counts as equity for the house construction.