Financing Land & Corner Bungalow

Hello dear forum members.

First of all, a big compliment to this forum - very informative & many good perspectives.

We are planning together with my wife to finance a plot of land + a new construction of an angled bungalow ground floor approx. 110m2 living space + attic approx. 60m2 in South Brandenburg, but we are not quite sure whether this is relatively sensible to manage with the existing parameters.

About our personal situation:
Married for 5 years (1 child - 6 years old) family planning completed.
Wife's income: €2800 net
Husband's income: €1700 net (both permanent contracts)
Child benefit not included.
Wife: 31 years
Husband: 35 years


Monthly expenses:

Rent €605 warm
2 cars. Insurance + tax monthly €100
Gasoline €200
Food: €400
Daycare: €220 including meal money
Electricity: €34
Broadcasting fee: €17
Home pension: €110
Disability insurance: €60
Life insurance: €50
Household contents & private liability: €14
Mobile phone: €45

The expenses mentioned above are fixed costs calculated on a monthly basis.


Equity €40,000
No home savings contract available.

No liabilities for 6 months.

Is it realistic with the given income & expenses to manage a financing amount of 300k (land + house construction - hopefully not pointless :)

The house bank itself gives the green light. Annuity loan 15 years at 2.30% effective interest with a monthly rate of €1400.
Special repayment annually 5% possible.

We ourselves are very conservative & cautious regarding the amount to be financed, but know from friends & acquaintances that such amounts are no problem for others with less income. (more risk-tolerant)

Many thanks in advance.

Best regards Punica.

Are you planning together with your wife? ;) Why Wohnriester? Otherwise, that should certainly be possible. Is it guaranteed to stay at the 300 k€? Is there enough buffer? Usually, it ends up being at least a little more expensive than planned in the end.

It is a Riester contract, which is also eligible for Wohnriester. The whole thing runs through a fund. The buffer should preferably be the equity, at least after deducting the property transfer tax & notary. €20,000 should theoretically still be above the €300k. Yeah, we are planning together with the lady :D.

If both of you continue to earn your money (by the way, child benefits can definitely be taken into account, as they will most likely flow in over the next 15 years = fixed interest period), the financing is easily manageable. You have also agreed on a high repayment rate.

I would personally, however, eliminate the special repayment option (why do you need it???) and exchange it for the option of multiple repayment changes. This would allow you to temporarily reduce the rate significantly, for example if your wife's salary disappears and you have to live only on your income. This should greatly reduce your fear ;).

Risk life insurance? Otherwise, think about it. Also keep in mind that the cars need repairs or maintenance and wear parts have to be paid for, or that you will eventually need a new car.

I would like to use the special repayment to keep the remaining debt manageable after the 15 years of fixed interest period.

What is the cost of the flexible repayment agreement in terms of interest surcharge? Is it only marginal?

The risk life insurance definitely has to be included.

Hello!

I would definitely still inquire with the common intermediaries. I am not a fan of Wohnriester, but I do have a Riester for retirement provision (have you been informed about the deferred taxation?)

If you are anxious, I would also have a 20-year fixed-rate calculation made.