Financing / cost estimation that realistic?

Hello everyone,

we are still relatively at the beginning and by chance have a first cost estimate from a regional construction company. In general, I can say that we did not expect this so quickly but initially only put ourselves on a 1-2 year waiting list for plots in the area, so that we would still have time next year to accumulate more equity. In addition, I am changing employers in December after 14 years and moving to the public sector. Therefore, it is generally unfavorable to apply for a loan during the 6-month probationary period, but the plot would be exactly right for us.

General information about us:

[*]36/35 years old
[*]Child planned in about 1 year
[*]employed IT 40 hrs. / employed public service 39 hrs.

Income and asset situation:

[*]gross 5,000 / net 3,000 he
[*]gross 4,000 / net 2,500 she + Christmas bonus + vacation pay

Equity

[*]35,000 equity saved by end of 2021
[*]additional 30,000 planned by end of 2022
[*]30,000 building savings contract matured by end of 2022
[*]savings funds as retirement provision 47,000 (we do not want to touch)

Housing costs:

[*]630 cold rent (114m² maisonette apartment)
[*]880 warm rent
[*]65 electricity
[*]80 telephone, internet, mobile phone

Mobility costs: = 436 € monthly (2 cars paid off with 15km commute + 1 motorcycle)

[*]120 maintenance/repairs
[*]60 insurance
[*]26 taxes
[*]200 fuel
[*]30 motorcycle

Insurance costs: 107 € monthly

[*]60 disability
[*]7 household contents
[*]9 liability
[*]12 accident insurance
[*]12 disability
[*]7 private health insurance

Living expenses: 870 € monthly

[*]600 groceries
[*]100 restaurant costs
[*]10 personal care/drugstore
[*]10 medicine
[*]50 clothing
[*]50 furniture
[*]50 tickets (football, cinema, concerts)

Savings contributions: 2,650 € monthly

[*]100 vacation
[*]250 building savers
[*]1,800 house
[*]400 retirement provision
[*]100 hobbies/gifts/miscellaneous

Income and expense totals:

[*]Total income = 5,500 €
[*]Total expenses = 5,088 €
[*]Balance = 412 €
[*]Sum of cold rent and dispensable savings contributions = 630 + 1,800 € = 2,430 €

Construction project offer until 15.11.2021:
Plot 550m² / 130€ = 71,500
City villa approx. 168m² = 397,909
Notary / real estate transfer 32,858.63 (due to developer binding)
Building staking out 700
Soil survey 540
Certified site plan 700
House connection water/electricity up to the house + wastewater from street 8,300
Energy consultant 5,000
One-time charge water supply and disposal 3,201

Total cost estimate 520,708.63 €

Which amounts are still actually missing here? Unfortunately, we are still lacking an assessment of what else to expect, precisely because we are still so early in the process. We had actually always assumed house connection costs rather at 15,000, a safety buffer in our imagination at 20,000, and another 18,000 for the outdoor facilities. So we think that 565,500 € is more realistic. Do you see a possibility to realize the desired construction project here? Will the banks consider the entire equity even if we do not want to touch part of it as a buffer? Which financing components would you recommend to us? The building savings contract is old and today I would no longer take out something like this, but what exists can of course also be used. It would be important to us to have the option to change the repayment rate during the term and about 5% special repayments in order to be able to reduce the loan to zero within an interest rate lock-in period of 20-25 years.

We would really appreciate constructive criticism and tips. If anything is still unclear, I am happy to provide more information.

Do you see a possibility here to realize the desired construction project?

Income-wise it is probably sufficient. The equity buffer is a bit thin, some financiers will opt out, others will charge a higher interest rate. Depending on family infrastructure and life planning, a child can mean deciding on parental leave and subsequently reduced working hours. That changes the income situation – I don’t see that taken into account in the planning. It is hard to say what is missing since the scope of construction services is unclear. Often a kitchen is added on top, many also change or complement their furnishings with the move. When deciding on upgrades, many want more than the offered standard, which quickly amounts to a few thousand. You have calculated a lump-sum buffer, which is already good. From experience, things always come up in the house – because one wants them or believes they need them. The breakdown of monthly costs will change, I would take that into account. Much of it requires some discipline (I know that particularly well since I lack it myself).

Hello everyone,

we are still relatively at the beginning and have by chance received a first cost estimate from a regional construction company. In general, I can say that we did not expect it to be so quick but had initially only put ourselves on a 1-2 year waiting list for plots in the area, so that we would still have time next year to raise more equity. In addition, I am changing my employer after 14 years in December and moving to the public sector. Thus, it is anyway unfavorable to apply for a loan during the 6-month probation period, but the plot would be exactly right for us.

General information about us:

[*]36/35 years old
[*]child planned in about 1 year
[*]employed in IT 40 hrs / employed in public sector 39 hrs

Income and asset situation:

[*]gross 5,000 / net 3,000 he
[*]gross 4,000 / net 2,500 she + Christmas bonus + vacation pay

Equity

[*]35,000 equity saved by the end of 2021
[*]further 30,000 planned by the end of 2022
[*]30,000 home savings contract allocable by the end of 2022
[*]savings fund as retirement provision 47,000 (we do not want to touch that)

Housing costs:

[*]630 cold rent (114m² maisonette apartment)
[*]880 warm rent
[*]65 electricity
[*]80 telephone, internet, mobile phone

Mobility costs: = 436 € monthly (2 cars paid off with 15km commute + 1 motorcycle)

[*]120 inspection/repair
[*]60 insurance
[*]26 taxes
[*]200 fuel
[*]30 motorcycle

Insurance costs: 107 € monthly

[*]60 occupational disability
[*]7 household contents
[*]9 liability
[*]12 accident insurance
[*]12 occupational disability
[*]7 private health insurance

Living expenses: 870 € monthly

[*]600 groceries
[*]100 restaurant costs
[*]10 care/drugstore
[*]10 medication
[*]50 clothing
[*]50 furniture
[*]50 tickets (football, cinema, concerts)

Savings: 2,650€ monthly

[*]100 vacation
[*]250 home saver
[*]1,800 house
[*]400 retirement provision
[*]100 hobbies/gifts/miscellaneous

Income and expenditure totals:

[*]total income = 5,500 €
[*]total expenses = 5,088 €
[*]balance = 412 €
[*]sum cold rent and dispensable savings = 630+1,800€ = 2,430 €

Construction project offer until 11/15/2021:
Plot 550m²/130€ = 71,500
City villa approx. 168m² = 397,909
Notary/property transfer 32,858.63 (due to builder binding)
Building staking 700
Soil survey 540
Certified site plan 700
House connection water/electricity up to the house + wastewater from the street 8,300
Energy consultant 5,000
One-time water supply and disposal payment 3,201

Total cost estimate 520,708.63 €

Which amounts are actually still missing here? Unfortunately, we still lack an assessment of what else to expect, precisely because we are still so early on.
We have generally assumed house connection costs of rather 15k, a safety buffer in our minds of 20k, and for the outdoor facilities another 18k. Thus, we think that 565,500 € is more realistic.
Do you see any possibility of realizing the desired construction project here?
Will the banks consider the entire equity even if we want to keep part as a buffer and not touch it?
What financing components would you recommend to us? The home savings contract is an old one and today I would not take out something like this anymore, but what is there can of course also be used.
It would be important for us to have the option of changing the repayment during the term and about 5% special repayment to be able to pay off within an interest rate lock of 20-25 years.

We would really appreciate constructive criticism and tips. If anything is unclear, I can gladly add more.

A few questions in advance.
1. The plot is developed. So no additional development costs to be expected by you?
2. Has a selection buffer already been included? You can easily count on 20,000 € + for that. It always depends on what is included in the house price. Electric shutters, raw construction height 3m, price per m2 of tiles, kitchen (which can easily cost 10-20 k€), fireplace, floor coverings, walls Q2/Q3 or already finished?

Many open questions :cool:

Beforehand, it is of course crucial to know exactly what is included in the €397,000 for the city villa – meaning: you would need to review the construction and service description. Only in this way can some incidental costs that might occur for you be quantified.

Who is your regional construction company? A general contractor (GU)? A prefabricated house provider? Solid construction / timber frame?

It always depends on how far you have already developed the offer from your GU, or whether you have really dealt with it intensively.

We certainly reached additional costs of about €30k from our 1st offer to our 5th - 6th offer – simply through upgrades, etc.

Just as an example of what kinds of upgrades or customizations there are in the trades, in case you haven’t dealt with this yet (this way you get a feeling for what else exists and how high the prices can be):

- Windows with aluminum cladding --> €4,000
- Burglar protection RC2N - €1,500
- 6 electric shutters - €1,500
- Upgrade wooden staircase: €1,500
- Floor coverings: €1,000-2,000
- Garage? That quickly costs €25,000
- Ventilation system: €12,000
- Upgrades front door / sanitary / window sills / doors / stairs / electrical --> can easily be €5,000


Then there are further incidental building costs that the GU does not offer you, but always come up:

- Civil engineering work – between €15,000 and €40,000 – depending on effort (basement?)
- Structural engineering check: €3,000
- Outdoor area: maybe €15-20k if done by yourself – if you have it done, you are quickly at €50,000
- Kitchen: €15,000
- Land charge: €3,500
- Building permit or notification procedure? depending on effort – €500 - €2,500
- Construction water / construction electricity.. €1,000
- Photovoltaic system?? Possibly mandatory if you start building? You are quickly at €20,000


You can certainly realize the building project with the really secure jobs, the salaries, your still relatively young age, and without children yet... I see no problem! You have also already saved some euros – that fits.

Financing components: I would always split... You will certainly need a KfW loan – thus component no. 1 – and then I would perhaps take one component with 10-15 years fixed term and possibly one component with 20-25 years fixed term – but that really depends individually... I would also get advice from various financial advisors here.

I also find repayment changes very, very important, especially with a child! We included that as well – definitely do it!

Otherwise, everything looks reasonable. Important is: Make a very good overview with really all possible costs! Be prepared, read yourself thoroughly into the whole matter, and try not to forget anything – this way you have proper cost transparency and you are well equipped!

According to our knowledge, the property is developed up to the plot, but the 4 meters into the house are still missing (this is also stated in more detail in the offer). Fireplace preparation, electric shutters, door between the garage and utility room, adjusted shell construction height, heat pump, additional shower in the guest bathroom are already included in the cost proposal.

Depending on family infrastructure and life planning, having a child can mean the decision for parental leave and then reduced working hours. This changes the income situation - I do not see this considered in the planning.

For us, it is actually rather uncommon to take parental leave for longer than 1 year and then reduce working hours, and therefore it is also not really planned. We can both freely choose between home office or office and thus also distribute working hours flexibly during the day.

According to our knowledge, the land is developed up to the property, but the 4 meters into the house are still missing (this is also stated in more detail in the offer). Fireplace preparation, electric shutters, door between garage and utility room, adjusted shell height, heat pump, additional shower in the guest bathroom are already included in the cost estimate. For us, it is actually rather unusual to take more than 1 year of parental leave and then reduce working hours, and therefore it is not planned. We can both freely choose between home office or office and can therefore also flexibly distribute working hours during the day.

Fireplace preparation probably means a chimney flue. The question is whether it is a LAS or not. A fireplace can easily cost €10,000. Electric shutters including central control? Or do you want to run to each one individually if they need to be lowered? What about controlled residential ventilation? In a new build house, this is actually mandatory. Costs about €12-15k. What about photovoltaic system/storage? If you are already building a new house, you should at least pay some attention to the environment.