Financial strength - is that enough?

Hello,

we would like to build a house, but we are unsure about the loan we could manage and therefore also the available budget for the house construction.

Brief financial overview:
Equity: 150,000
monthly income (together): 3,750

We were thinking of about 400,000 that we could "afford" -> parents will additionally contribute about 50,000.

So we would need to take out a loan of about 200,000.

What worries or concerns me is a loss of income, whether due to unemployment, illness, children, etc.

oh yes, currently we pay a warm rent of 660 and save about 1,300 per month.

Vacations, etc. are not a must for us, if possible we like to go away for a few days, but if not, it’s not so bad.

I would just be interested to hear from those who have dealt with the topic more intensively or otherwise have some knowledge about it - feasible or not?

Thank you very much in advance

With the basic data: thumbs up! The loan will be with reasonable repayment (Z+T = 6%) at TEUR 1 per month, so you will be through quickly. Equity is also great. Does the grant from the parents still need to be repaid?

Hello nordanney,

thank you for your reply!
Parental grant does not have to be repaid.

Now we just have to hope that we get something here for 400,000 - that probably won't be easy given the land prices.

Hello Marquise,

I see it the same way as nordanney - you should not have any problems with the framework data.

I would recommend that you seek a conversation with your house bank - keyword "What can we afford" - In this appointment, the bank would inform you without obligation how much loan they would be willing to grant you and what it would cost you.

Please ask when making the appointment which information you need to bring to the meeting.

This way you will know what is maximally possible - that also gives some security in case you exceed the total costs of TEUR 400, which is by no means unlikely in Bavaria.

Regards,

Dirk

Hello Dirk,

thank you for your reply as well!

We had already touched on the financing during a bank appointment (about a different topic). The employee’s statement was just that it’s absolutely no problem and not an unusual amount. We have already calculated it with the current interest rate - it didn’t look too bad either. Well, but does he just want to sell without regard to our actual ability to perform or does the statement actually have value? I always have some doubts whether the bank only sees the profit within the loan framework...

I just have a bad feeling when I think about indebting myself with a quarter million or even more

When children arrive (and they are definitely wanted), I won’t be able to work full-time anymore, which will also reduce our repayment capacity again. On the other hand, we are still very young (24 and 28) and still have many working years ahead of retirement

Best regards Marquise

Hello Marquise,

I would still recommend that you arrange an appointment with a Baufinanzierungsspezialist at your bank.

The topic of construction financing has become so complex that it is advisable to talk to someone who wirklich knows what they are doing.

Of course, the loan amount is initially very high, but if you compare it to what you would have to pay in rent for your entire life, it puts the whole thing into perspective again.

We structured our financing so that we could manage it with just one salary if necessary.

But at your age, with the very considerable equity, a lot would have to go wrong for your financing not to run smoothly.

Regards,

Dirk