Evaluation of Construction Project / Credit Offer

I also never quite understand the topic of child or parental leave here. Due to the change in tax classes, the OP + wife have about 5,000 net (3,585 + 1,420) + child benefits = 5,200 during parental leave. Afterwards, it remains the same net amount through part-time work. In addition, this will not happen this or next year but probably not until at least 3 years from now. Until then, there will also be salary developments of at least 300-500 net. The burden of the loan remains the same.

I never quite understand the topic of children or parental leave here either. Due to the change in tax classes, the OP + wife have about 5,000 net (3,585 + 1,420) + child benefit = 5,200 during parental leave. Afterwards, it stays the same net by working part-time. Also, this won't happen this or next year, but probably earliest in 3 years. Until then, there will also be salary developments which will be at least 300-500 net. The burden from the loan remains the same.

You can also talk yourself into anything.

I wonder who else should finance around 550,000 if not you.

I never quite understand the topic of children or parental leave here.

Income is all well and good, but if you haven’t been able to save until now – for whatever reason, doesn’t matter – can you suddenly save with a new house? The 30,000€ equity goes toward property transfer tax and kitchen. So it’s a 100% financing if you’re honest. I find many things still too rose-tinted, for example contributing 40,000€ of personal work. Even as an ambitious hobby DIYer, that’s quite a high claim. Who in a managerial position is supposed to manage that? Weekends aren’t enough for that. And with all these points it quickly becomes clear that the project will be much more expensive than the assumed sum.

First of all, thank you again for the constructive criticism; it provides us with many valuable points to consider.

To address some discussion points...

- Why haven’t we saved more so far? It has been a combination of not wanting to and not being able to in the past. Our incomes were significantly lower until 1-2 years ago; add to that an expensive wedding and costly honeymoon. We have chosen this consciously, as we do not want to take long-distance trips with children. There is no backlog of investments at our end; on the contrary, everything is new and up to date, our cars, kitchen equipment, electrical appliances, etc.

- The topic of managerial position and personal contribution: I find this objection very good and justified; however, no overtime is desired in our case, and any overtime hours that accrue can be compensated. The overtime I have accumulated so far I could save up, as well as some vacation days. Currently, 200 hours and 20 + 30 new vacation days are available. I think by the time we come to our personal contributions, 300 hours and 60 vacation days will be realistic.

- Income with children, the calculation with parental allowance has already been made above and is essentially correct; some additional optimization is possible through tax planning before parental leave. After parental leave, my wife will continue working at 60%; due to the tax classes, etc., the income will remain at a similar level, although of course 1-2 children will also cost money.

- Naturally, we have also considered waiting 1-2 years and then tackling the matter with more equity. However, we have some concerns here:

1. Our additional equity will, in our estimation, go toward significantly higher prices by then (land costs are currently rising massively; the plot we found is a bargain, and building the house itself is becoming increasingly expensive).
2. We are not getting younger and want to have children only once the house is finished; if we were to bring that forward, we would need more space and have higher rental expenses, which does not really move us forward much.

- Can we take out a loan elsewhere? Theoretically yes, but we don’t want to. An unsecured employer loan of up to €80,000 at 1.05% would be possible.

- I also find the critical consideration of the fixed interest rate good. Even though it is hard for me to write this, as an only child, I will receive a larger inheritance over the next 10-15 years (even though I hope it will not be so, realistically it will be). In this sense, I will already be transferred the house this year (market value approx. €500K, 2,500 sqm plot). However, I do not want to encumber it, and a right of residence will be registered, which naturally also greatly limits the possibility of encumbrance. However, I would like to wait with the transfer because I want to take advantage of the KfW conditions for the first-time purchase of property.

That’s it to shed some light on the situation.

You can also talk everything up nicely.

Well, the fact is that on average salaries have increased by 4% per year over the last 10 years. With the right financing (fixed interest period & possibility of special repayments due to potential inheritance) and your age, I see the plan as realistic if you stand behind it as described and reduce your luxury expenses. From my own experience, this happens automatically when children are involved.

First of all, many thanks again for the constructive criticism; it provides us with many valuable points to consider.

Thanks for the feedback and for not walking away offended.

Just approach it realistically, plan for higher costs, don’t sugarcoat anything anywhere, and it will work out.

Can we take out a loan elsewhere? Theoretically yes, but we don’t want to. An unsecured employer loan up to €80,000 at 1.05% would be possible.

Perfect for refinancing in case of great need.

PS:

Currently there are 200 hours and 20 + 30 new vacation days. I think by the time we get to our own contributions, 300 hours and 60 vacation days will be realistic.

Well, the employer will be happy when you take three months off (all at once) for your own work And tiling, painting, and flooring don’t take that long, you are two after all.