Evaluation of Construction Project / Credit Offer

  • Erstellt am 2020-01-10 18:15:42

BauherrSaarlan

2020-01-15 11:35:45
  • #1


Thank you very much for this truly great post and this critical perspective.

Regarding point 1: I of course agree with you there, obviously there are much easier matters than restricting one’s consumption. We have now done this for a few weeks (of course not a representative period) and it works quite well. The big challenge will be to sustain it long-term, although over the past few weeks we have also disciplined ourselves more than necessary and given up more than what we would actually need according to our own calculations.
But at this point the project will either work or fail.
However, a large part of the consumption was deliberately done by us. The plan to build a house and have children has been around a bit longer, but beforehand we still had dreams we wanted to fulfill and we have fulfilled them.
In certain areas, I also have a kind of “stock thinking” which I think will benefit us in many ways in the future, since many things are available in more than sufficient quantities, from which we can draw in future without losing liquidity.

Regarding point 2: We basically also see this as critical and associated with some risk. However, as things stand now, we don’t see a really sensible alternative except possibly lowering the project costs somewhat overall.
Waiting and saving more equity, in our view, dissipates with rising costs.

Regarding point 3: That is why we try to plan everything as precisely as possible and appreciate any tips regarding potentially overlooked or insufficiently considered costs.

Concerning the energy standards, I am only partially in agreement, although I do understand some controversial opinions and views here.
What is relatively important to us, also because obviously the large buffers are not included in the calculations, is that even with children after all possible expenses there still remains 800€ per month + usually 10,000€ per year. But we do want to live a little more than sacrificing everything – we want to be able to plan energy costs as well as possible and therefore keep them as low as possible.

With prefab house providers, KFW55 is usually already the standard. The upgrade to KFW40 is mostly covered by the higher subsidy, so it’s a non-issue.
The step towards KFW40+ is then again somewhat bigger and would cost about +10,000-12,000€.

We have already requested a smaller floor plan at the first provider (169 sqm instead of 181 sqm), which had a price impact of about 25,000€, even with a better layout without major compromises concerning the rooms.

We currently end up with a total price of 487,000€, so already slightly under 500,000€.

We considered the photovoltaic system with 20,000€ (which theoretically might cost less), so if we went from KFW40+ to KFW40, we would be at 467,000€.

If we then deduct the fireplace in the living room, we would be at 459,000€. The fireplace isn’t really sensible in a KFW40 house anyway; it’s just about the "living comfort factor" for us.

So, we see a downgrade to 459,000€ as possible, including fireplace preparation and photovoltaic preparation.

In the total costs, we included the following buffers/upgrades and ancillary building costs:
Electrical upgrade: 2,500€
Electric and aluminum roller shutters: 9,500€
Air/water heat pump with central ventilation system, underfloor heating, 2 additional towel radiators: 20,000€
Front door upgrade: 3,000€ (from plastic to aluminum with side panel)
Upgrade of roof tiles to clay tiles: 3,000€
Upgrade of downpipes to titanium zinc: 2,000€
Staircase upgrade: 11,000€
Soil investigation / surveying etc.: 10,000€
Connection costs: 10,000€
Construction electricity, construction water, other fees, etc.: 15,000€
Earthworks: 15,000€
Kitchen: 25,000€

I don’t really see a significant change to the loan amount here, but at least there is an additional buffer of 41,000€ for unforeseen expenses and upgrades that we currently don’t think about.
 

BauherrSaarlan

2020-01-15 11:42:14
  • #2


Also a very good contribution – thank you for that.

We actually want to plan so that there is enough buffer everywhere possible; for us as people building for the first time in our lives, of course, it’s relatively hard to estimate.

That’s why our calculations change almost daily. Of course, we won’t be able to cover all possible scenarios, but we at least hope to manage with the planned buffers through individual adjustments.

Basically, we are currently striving to adjust our planning so that the general buffer becomes somewhat larger.

Regarding children and finances: According to our current model, we calculated part-time as 20 hours; it is actually planned with 25 hours (so here still a small buffer). We definitely do not want more than 25 hours because otherwise, it would be too difficult in terms of childcare.
 

hiS1988

2020-01-15 12:34:43
  • #3
Regarding the loan, you should take another look, we got good conditions in November here:

320,000 € at 0.95 %
100,000 € at 0.65 %
100,000 € KFW at 0.75 %

We have to contribute 60,000 € in equity.
Our net income is slightly higher but I also don’t see any problems with you realizing that.
Furthermore, I have experienced that loan brokers sometimes add a bit on top of the bank interest rate, so it is definitely worth talking directly to the bank.

I find your concept very good, that’s basically how I see it too. Our sampling is only in March, I suspect (like many here as well) that quite a bit of money will be burned there. A precise analysis and comparison of the construction service descriptions of the providers is definitely worthwhile. It’s the small things that later become a big extra cost. For example, a stupid outdoor water tap for a slim 500 €.

In any case, I wish you lots of luck!
 

Altai

2020-01-15 13:13:02
  • #4
That is certainly quite correct. However, if you assume that income increases by 2% per year due to inflation compensation, then in 15 years the €1,500 installment will increase to about €2,000 just through this effect alone. That means the €2,100 in 15 years corresponds to (almost) the same proportion of salary as the €1,500 do today. Especially with longer fixed interest periods, the remaining debt is somewhat relativized. Here’s an example from me... I have different components, the longest being the large bank loan with 15 years, and by the time this period expires I will have "taken care" of (fully repaid) all others. I will be left with about 55% of the whole amount in 15 years (assuming everything goes as I imagine!). If I expect inflation adjustment for my salary as mentioned above, I can afford a double installment for this 55% remaining debt than what I am currently paying into this component—and it is the same proportion of salary as now for the entire construction financing. Therefore, an annuity of over 10% is then no problem. I actually look to the future quite calmly, although many here would surely have warned that the remaining debt is way too high and the risk of interest rate increases is incalculable... Of course, you cannot start a follow-up financing with a 2% repayment rate anymore. After all, you want to be finished at some point.
 

Maschi33

2020-01-15 14:46:29
  • #5

Here, however, I have to interject. It can definitely make sense to finance a car—at least partially—if you can take advantage of 0% financing. Namely, when the capital, instead of driving around town on four wheels, is parked in a portfolio yielding a significantly higher return. However, it is very rare that someone has the full amount for a new build sitting idle in their portfolio. Of course, real estate financing is always considerably riskier than car financing, unless of course you want to finance a new Porsche 911 GT3 RS.
 

Hausbau2022

2020-01-15 15:54:55
  • #6
I totally agree with you, but he generalizes about others without any ifs or buts, that's why I wrote it...
 

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