Existing property or construction financeable?

  • Erstellt am 2020-07-02 13:00:03

Mickykitty

2020-07-02 13:00:03
  • #1
Hello,
I am completely new here, as I discovered the forum recently and found the wealth of knowledge here very valuable. So here comes the questionnaire about our situation:

General Information About You:

    [*]Who are you? Married couple
    [*]How old are you? Me 33, my husband 39
    [*]Any children? 1 (one and a half years old)
    [*]Any children planned? No, planning completed
    [*]What do you do professionally? He is a civil servant, switching to higher service in December after part-time master's studies, I am an employee in the public sector, permanently employed in the upper service
    [*]Are you employed, self-employed, retired, housewife, househusband, etc...? See above.
    [*]How many hours do you work? He full-time, I currently 63% part-time. Probably increase to 70% later. Earliest full-time again in 10 years.

Income and Asset Situation:

    [*]What income do you have (gross/net)? Net household income 5300€
    [*]How much child benefit do you receive? 204€
    [*]Other transfer payments such as parental allowance, sick pay, etc...? -
    [*]How much equity do you have? 35,000
    [*]How much equity do you want to invest in the house project? 30,000

Expense Situation:
Expenses already included in other positions can of course be omitted. This list is not exhaustive and can be expanded or summarized arbitrarily. Please make sure to enter all costs monthly, even if they only occur annually!

Housing Costs:

    [*]Current cold rent 590 €
    [*]Current warm rent 800 €
    [*]Electricity 50 €
    [*]Gas 100 €
    [*]Water, sewage, garbage fees, street cleaning
    [*]Phone, internet, mobile phone 150€

Mobility Costs:

    [*]Monthly ticket for bus and train (also for children!) 50€
    [*]Car loan (or savings rate for new car) -
    [*]Insurance 58€
    [*]Taxes 260€
    [*]Fuel 100€
    [*]Repairs
    [*]Other
    [*]Is there a second car, motorcycle, scooter? Please specify all points again! -

Insurance Costs:

    [*]Private health insurance (also supplementary health insurance, daily sickness allowance, etc.) 277€ (my husband and our child)
    [*]Liability insurance (also pets) 400€ (incl. household contents and motor vehicle liability)
    [*]Capital or risk life insurance
    [*]Pension insurance (also Riester, Rürup, etc.)
    [*]Disability insurance
    [*]Accident insurance
    [*]Household contents insurance
    [*]Legal expenses insurance
    [*]Other insurances (e.g. travel insurance, funeral insurance)

Living Expenses:

    [*]Groceries
    [*]Restaurant costs
    [*]Personal care/drugstore
    [*]Pets (food, vet, medicine, stable costs)
    [*]Medication
    [*]Clothing
    [*]Furniture
    [*]Daycare/school fees (and meal money)
    [*]Tutoring
    [*]School supplies and books
    [*]Club fees/gym
    [*]Babysitter
    [*]Toys
    [*]Cleaning
    [*]TV/video/audio/CDs/DVD
    [*]Tickets (soccer, cinema, concerts etc.)
    [*]Donations
    [*]Other
    [*]Total approx. 1500

Savings Contributions:

    [*]Vacation
    [*]House 1000€
    [*]Retirement provision
    [*]Hobbies/gifts
    [*]Other


Other Expenses:

    [*]Maintenance payments? -
    [*]Loans? -
    [*]Other? -
    [*]Was anything forgotten? Then please specify here at the latest!

Income and Expense Totals:

    [*]Total income 5500€
    [*]Total expenses 4500€
    [*]Balance 1000€
    [*]Of which cold rent and dispensable savings contributions (e.g. savings rate for house) 1590€

We are interested in this property:
General Information about the Property:

    [*]How large is the plot? 427 sqm
    [*]What are its dimensions?
    [*]What is the standard land value? 205
    [*]New building, old building (year built), house type? Detached single-family home 1986
    [*]Garages? 1 finished garage, 1 parking space
    [*]How big is the house? (living area / usable area) living area 97 sqm, usable area approx. 50 sqm
    [*]What is the market value of plot and house? According to bank valuation 295,000 €, asking price 385,000 €, plus 46,000 € incidental purchase costs

Construction or Purchase Costs:

    [*]Plot costs
    [*]Development costs
    [*]Acquisition incidental costs (notary, court, property transfer tax, broker)
    [*]Construction or purchase costs (incl. architect, structural engineer)
    [*]Renovation and/or modernization costs
    [*]Additional construction costs (e.g. house connections, soil expert, construction power, etc.)
    [*]Outdoor facilities/terrace, paths, garden design, fences etc.
    [*]Financing costs (e.g. fees or commitment interest)
    [*]Total costs

Other Costs:

    [*]Kitchen costs
    [*]Furniture, lamps, decorations
    [*]Other "not acquisition, acquisition incidental, construction or additional construction costs"

Cost Summary:

    [*]Total costs 431,000 €
    [*]Deductible equity 30,000 €
    [*]Financing amount 401,000 €

Necessary Loan Details:
(for multiple components, specify for all components, for multiple variants please distinguish clearly):

    [*]Loan amount 401,000 €
    [*]Type of loan (e.g. annuity loan, bullet loan etc.) 100,000 € KfW, 280,000 € annuity loan, 25,000 € subordinated loan
    [*]Interest rate (p.a. nominal, otherwise effective) KfW 0.8%, annuity loan 2.14%, subordinated loan 6.8%
    [*]Interest fixation period KfW 10 years, annuity loan 15 years, subordinated loan 10 years
    [*]Remaining debt at the end of the interest fixation period 250,000 €
    [*]Fictitious total term until full repayment
    [*]Initial repayment rate 2%-2.5%
    [*]Monthly installment 1,560 €
    [*]Special repayments possible? (Indicate amount) Annuitätendarlehen 5%, subordinated loan anytime up to 100%
    [*]Repayment rate change possible? (Conditions such as number, repayment rate range) 3x


Explanations about our situation:
We consulted Dr. Klein to find out what we can afford and whether we can get a loan.
Due to our jobs, the financial advisor was sure it would work up to 400,000 €, of course depending on the house.
We are searching within a 35 km radius around Düsseldorf. Then we found a nice house. It looks very nice from the outside and the location is perfect for us (cul-de-sac, play street). We would have been willing to pay the purchase price.
Both Deutsche Bank and National Bank rejected because of the horrendous valuation. According to this Metterschmidt? valuation program, the house is worth 295,000 €. We cannot cover the gap with equity.
Now the broker referred us to another financial advisor who made us the above offer. I was horrified right away and with the expensive house I am not willing to pay for an expensive loan as well.
Apparently, we cannot afford the house.

Another financial advisor who immediately said after 5 minutes of conversation that we cannot represent this house with our equity advised us to build a house.
We could pay the incidental purchase costs from the equity; the additional construction costs would be financeable through the loan.

Now my question: Is that so?
How do you assess our chances?
We firmly expected that our jobs and our legal good income and no other loans would be positive for the banks. Apparently not as much as hoped. Maybe also because of the corona situation?

The financial advisor who advised us to buy said we can afford house costs including land up to 350,000 €. Since we want at least 400 sqm of land and detached, we are looking in the Mönchengladbach, Viersen, Krefeld, Moers, Duisburg region. There you can get a plot for around 100,000 € with luck.

Now my question:
Is it worth continuing to inform ourselves about building a house? Or do you consider this a lost cause here?

Regarding existing properties: the prices here in the region are absolutely insane at the moment. Of course for a long time, but since December last year it has increased again. Since we do not want a very small plot and preferably detached, there is hardly anything on the market. Those that are offered are overpriced (and are valued much lower by the banks). So again begins the spiral of our dream house, which I described above...
Can we even afford a house?? What do you think?

If questions come up like "why so little equity?"
I have only been earning money for just under 2 years. Took too long for my education/studies. My husband also did not earn that much from the start, we lived in Düsseldorf and not in asceticism. We traveled and had expensive hobbies, a big wedding, BAföG repayment (we no longer lead this lifestyle, so a change is not necessary or questionable).

I look forward to your answers!
 

nordanney

2020-07-02 13:14:35
  • #2
How is the demand for exactly this house? If banks value the house so low (loan or market value?), you should really think about whether the house is worth the price. The loan is not expensive! If not now, when then to finance? Nonsense. You can either buy or build. For normal properties, the bank’s valuation will be the same for both options. You have a good income, but you have lived too high to save equity. That's not bad though. With the income you have, you can accomplish a lot, buy and finance. Definitely think about it! There are many tips here in the forum. You apparently are still looking in the wrong places. Especially Krefeld, Moers, Duisburg, etc. are cheap regions (they are also plots, not nice cities). I just bought myself in Neukirchen-Vluyn (also built there a few years ago). Take a look at the smaller towns/villages along the A57 / A40. There is a relatively large selection of houses (and also plots).
 

Mickykitty

2020-07-02 13:21:46
  • #3
Hello,
Thank you for your reply!
I believe the demand for the house is low. The realtor does mention other interested parties, but they probably don't want to pay the price. And they wouldn't be able to secure the loan either.

We are looking in exactly this region, but honestly, I haven't discovered much on ImmoScout in the last few weeks that is realistically priced... The further away from Düsseldorf, the lower the banks' valuations.
And Krefeld has become incredibly expensive. It used to be cheap, but now?! It's unbelievable!!

Don't you think these almost 7% interest rates are too high?
My husband would probably go for it; he has calculated that if we put everything leftover (about 1000-1500€/month) into the special repayment of the usurious loan over the next four years, we would be free of it quickly and although we would have paid a bit more interest in the end, we would have paid it off faster...
 

nordanney

2020-07-02 13:36:38
  • #4

Then offer a lower purchase price. If the sellers realize they have miscalculated, they will probably go down on the price.

No, that's not true. With normal prices, purchase price = roughly market value and purchase price less 10-20% = lending value.

That is relative

In the commercial real estate financing sector, you move more in the range of 8-14%. It's capital that is completely unsecured at the end of the chain.

As I said, take a look north of Krefeld ==> Neukirchen-Vluyn, Kamp-Lintfort, Rheinhausen, Kerken, Kempen, Rheurdt, Tönisvorst.
 

ghost

2020-07-02 16:19:46
  • #5
You can afford the above financing. Sounds like blah blah from the advisor. I would look for another / new advisor. The problem seems to be the property. If it suits you: offer 285K to 300K. If the seller does not accept that, keep looking.
 

Mickykitty

2020-07-02 20:31:12
  • #6


Well, he did not refer to the above-mentioned loan offer (someone else did that), and only confirmed the double rejection by the Deutsche and Nationalbank. A normal annuity loan is not possible without a risk surcharge due to the value of the house.

Today we declined to the owners. They were quite shocked by the low bank valuation. The problem is the realtor, who even assured them that the house was worth €450,000. The owners would probably go down a bit on the price after a short consideration period, I have the feeling the realtor is blocking that. But anyway, the matter is closed.

One more question about the construction loan: The company Allkauf Haus has a strong presence on many plots in this region. Actually, I didn’t want a prefabricated house... But maybe that is an option after all. How does the financing amount look for a prefabricated house? Do banks assess that significantly worse? Is a loan of €350,000 (house and land) plus €50,000 additional construction costs feasible?
 

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