Financing plan for house construction in 3 to 5 years

Good morning everyone,

I would like to take this opportunity to present my project and receive constructive opinions, criticism, or even "improvement suggestions."

About me:
Permanent employment contract. Completed dual studies 7 months ago. Previously served in the Bundeswehr and trained as an industrial clerk.

About the finances:
A €20,000 home savings contract has existed for several years. €3,000 saved. The saving/contribution rate has now been reduced to 1% per year (due to an old home savings contract, good credit interest). Therefore, only eligible for allocation in March 2022.
In September 2015, I will buy my current leased vehicle. From this point on, after deducting rent, €2,000 will be available. I am already putting aside €900/month for the car (3 years old) and will continue this savings rate from October 2015 for home financing!
Otherwise, I unfortunately have to start at "zero," no land, no gifted car, no inheritance from grandmother, etc.

In summary:
€900.00 / month from October. Car (3 years) – no new one will be bought soon. €1,100 left for living expenses.

The goal:
I definitely want to purchase a home in 3 to 5 years (then 29 to 31 years old). I want to be able to finance this alone, i.e., the plan is based on my finances without a possible life partner and their potential financial resources.
Since I am (unlike my father, who built the entire house himself) not skilled in crafts and cannot rely on such services, I need a turnkey house.

Data about the house:
- Prefabricated house on a slab foundation
- from 135 to 150 m²
- including plot (approx. 500 m²)
- energy-efficient house
- balcony desired
- carport
Calculated costs after reviewing many catalogs and offers (from €200,000): €250,000.00

Now I have received several offers from LBS regarding a home savings contract.
The three attached files each contain calculations for:
- €200,000 home savings contract and €50,000 KFW loan
- €150,000 home savings contract and €50,000 KFW loan and €50,000 loan
- €100,000 home savings contract and €50,000 KFW loan and €100,000 loan

About the calculations:
- In all cases, I assume construction in April 2019 (average)
- The KFW loan is calculated with an interest rate of 1.5%
- A loan and pre-financing loan each with 2.5% (calculated with many other rates as well, but these are hidden for clarity)

The lower the amount of the home savings contract, the higher the total (financing) costs for the project. But the monthly burden is lower.
For this, it should be noted: When moving from the current rental apartment to the house, no additional financial resources will be available, since I currently pay a rent (after the latest increase, including utilities!) of €230 (company apartment).

Questions/doubts:
- Is the project realistically feasible with any of these three calculations?
- Are the total costs (per calculation) acceptable for home financing? I have no experience with this so far.
- Should I opt for a more expensive financing and thus prefer the lower monthly burden (i.e., with €100,000 home savings contract)?

I would really appreciate receiving some feedback. I have been tearing my head over this project for months already, including sleepless nights.

Thank you very much in advance!!

Best regards,
NeuHaFe

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Hello,

I have removed the names of the providers; they are not necessary for discussing your project. If there should be a discussion about one or more providers, I will have to move the thread to the moderated forum.

Thank you for your understanding!
Construction Expert

Slightly more organized files:

Pretty early ;-) ... I would first calculate realistic costs. The catalog offers often contain standards that need to be upgraded (for an additional cost) to live decently (e.g. size of the windows, which alone amounts to a few thousand euros). Then think about building equity. Then calculate again. Possibly consider an apartment as an interim solution, which can be sold again at the appropriate time. In other words: 3-5 years is a very long period in this situation. Many things can come up, professionally or personally (family planning). Mathematically, it may all seem barely feasible at the moment, but it is burdened with many uncertainties. Above all: the costs for the plot and house appear to be estimated too low. And don't forget the ancillary costs (fees, taxes, furnishings e.g. kitchen, etc.).

Hello HomeMyCastle,

thank you very much for the feedback.
In the catalogs, the prices range from 160,000 to 190,000 for a turnkey house with my size requirements. Therefore, I have included a foundation slab each time (20,000 -> 180,000 to 210,000). I have also planned ancillary costs of 20,000 within the 250,000, so there would be a buffer for enhancements of 20,000 to 50,000.
However, it is quite possible that I am still too optimistic with this. I always read very different opinions in various forums about the quality and equipment of such a prefabricated house!
I am so early with this because I want to secure part of the financing through a building savings contract. I do not expect interest rates to decrease further in the coming years. Rather the opposite.
Hence all the calculations (200, 150, and 100K).
I cannot form much more equity than through saving with one of the building savings contracts. That would be around 40,000 in 4 years.

But I already suspected that I might have been too optimistic with the calculation...

Thank you very much again!

No problem!

One more tip on the topic of prefab houses: The best thing is to ask right away for the detailed construction description and the extra price list. Through the extra price list, you can quickly get to the "critical" points in the construction description.

Topic building savings contract: Another option would be to increase the existing building savings contract and save massively. Then, at the appropriate time, you would have equity and already a loan claim at a manageable interest rate, which can then be integrated into the overall financing.

Hello,

I will refrain from commenting on financing options, as it is not my area of expertise; others here are much more competent in that than I am ;)

Data about the house:
- Prefabricated house on a concrete slab
- from 135 to 150 m²
- including plot (approx. 500m²)
- energy-efficient house
- balcony desired
- carport
calculated costs after scouring many catalogs and offers (from 200,000): 250,000.00 €

I have deleted the provider's name and therefore know who it is about. For this reason, I can reliably assure you that your house cost estimates will not be sufficient. Furthermore, the green subsidiary is not the specialist for finishing; rather, it serves builders with a trailer hitch.

This means if you cannot or do not want to do the work yourself but want to enjoy your prefab house for a long time, you will have to turn to more reputable providers, who then will charge their justified price! In this case, you may expect costs (as of today) of around EUR 270,000 for a prefab house of 140 sqm including balcony + carport. Additionally, the typical ancillary building costs of EUR 40,000 and reserves for extras. Of course, plus the cost of the plot.

You seem to have primarily focused on the price in your selection and less on the promised services. Not a good basis :confused:

Regards from the Rhineland