Hausen
2016-11-10 00:14:28
- #1
Hello everyone,
I am the new guy who has only been dealing with the topic for a few months but still has many questions...
I’ll start with the key data:
We (my girlfriend and I) are in our early 30s, in secure permanent jobs, and earn a combined net income of €4500, with an upward trend. We plan to have children in the next 2-3 years. After parental leave, work will initially be resumed at 50% and after a certain period, full-time again. We currently rent but have recently decided to change that and invest in or build a property.
Equity... hmm... under €15k, so let's say it’s non-existent.
I don’t really know how to structure the question(s) because there are various possibilities and I also didn’t know which forum would be best suited, but well, I’ll try my luck here since the focus is financial.
1.) I know no one can answer concretely, but... we aim for a solid house with about 160m² of living space. Plots of land that could be suitable cost around €50k, excluding additional costs.
I have a hard time estimating what a solid house of 160m² with medium-level fittings would cost.
Of course, it depends on details, technology (heating, KNX (which is definitely not affordable, so it wouldn't count as medium level for me) etc.) and materials (insulation, roof, etc.).
Let’s assume simple to medium fittings, whatever that may mean.
Assuming we would also like a basement, what price range can we expect here?
Plot: €50k (excluding additional costs)
Solid house with basement: approx. €180k - 230k (excluding additional costs)?
Total sum including all additional costs approx. €350k? Somewhat realistic or a pipe dream?
2.) Financing the whole thing... if the above amount is correct: financing for €350k.
€4500 net income. Is that even remotely possible with the above amount?
When I try all the loan calculators and enter €350k.... well... you know yourselves...
Could it be that this project was doomed to fail from the start?
If not, does that mean very big restrictions?
Regarding the current financial situation, you could say we live like small maggots in bacon (feel wise). Twice a year we go on a long-distance vacation costing €3-5k each time, often eat out, and generally don’t have to watch our money too much.
Rent is about €750 warm. Furthermore, we can count on planned salary increases. Also, we will definitely get married very soon. Both will also affect the income... although children in 2-3 years will again have a counter effect.
3.) If 1.) and 2.) can be reconciled...
Closing the financing... my plan so far would have been a fixed interest rate for as long as possible, ideally 30 years. Is that even worthwhile? There’s a 5% prepayment option everywhere anyway, which we would also include. Unfortunately, I don’t know enough about alternatives. Is it worthwhile to take advantage of subsidies, or is that even possible with the planned house size/type/amount? Well, better stick to the core question of this point: if financing, then a long fixed interest rate desirable given current times or rather pursue other plans?
4.) Alternatives if 2) and 3) are doomed to fail...
Instead of building, is it better to buy a house? Is that worthwhile?
I have to say, over the last six months we have looked at about 10 properties and with one we had to really consider it, but decided against it. Basically, you can say the properties we liked cost between €170k and €250k and all had no great values (e.g. energy certificate) and quite a bit of renovation or refurbishment needed. Ok, if you want to spend as little as possible and can live in houses built in 1970 (which was the case for almost all we saw) and with partly 15-25 year old heating systems, partly no RCD in the electrical installation, you could say we could get a property around €200k-250k that you could live in. But... honestly... don’t you get caught up in renovation mania then? Doesn’t something break all the time? Don’t you have to do new things again and again? Keywords: new insulation, heating, roof, this, that, etc.? After 10 years of living in a 1970 house, isn’t it possible you end up with an amount that would have been enough for a new build anyway? You know what I mean... or surely it’s already obvious to everyone, but as I said, I am relatively new to all this...
That’s it for now.
I appreciate any help, be it criticism, suggestions, the naked truth, or alternatives.
Please bring it on.
Thanks a lot in advance.
Best regards
Hausen
I am the new guy who has only been dealing with the topic for a few months but still has many questions...
I’ll start with the key data:
We (my girlfriend and I) are in our early 30s, in secure permanent jobs, and earn a combined net income of €4500, with an upward trend. We plan to have children in the next 2-3 years. After parental leave, work will initially be resumed at 50% and after a certain period, full-time again. We currently rent but have recently decided to change that and invest in or build a property.
Equity... hmm... under €15k, so let's say it’s non-existent.
I don’t really know how to structure the question(s) because there are various possibilities and I also didn’t know which forum would be best suited, but well, I’ll try my luck here since the focus is financial.
1.) I know no one can answer concretely, but... we aim for a solid house with about 160m² of living space. Plots of land that could be suitable cost around €50k, excluding additional costs.
I have a hard time estimating what a solid house of 160m² with medium-level fittings would cost.
Of course, it depends on details, technology (heating, KNX (which is definitely not affordable, so it wouldn't count as medium level for me) etc.) and materials (insulation, roof, etc.).
Let’s assume simple to medium fittings, whatever that may mean.
Assuming we would also like a basement, what price range can we expect here?
Plot: €50k (excluding additional costs)
Solid house with basement: approx. €180k - 230k (excluding additional costs)?
Total sum including all additional costs approx. €350k? Somewhat realistic or a pipe dream?
2.) Financing the whole thing... if the above amount is correct: financing for €350k.
€4500 net income. Is that even remotely possible with the above amount?
When I try all the loan calculators and enter €350k.... well... you know yourselves...
Could it be that this project was doomed to fail from the start?
If not, does that mean very big restrictions?
Regarding the current financial situation, you could say we live like small maggots in bacon (feel wise). Twice a year we go on a long-distance vacation costing €3-5k each time, often eat out, and generally don’t have to watch our money too much.
Rent is about €750 warm. Furthermore, we can count on planned salary increases. Also, we will definitely get married very soon. Both will also affect the income... although children in 2-3 years will again have a counter effect.
3.) If 1.) and 2.) can be reconciled...
Closing the financing... my plan so far would have been a fixed interest rate for as long as possible, ideally 30 years. Is that even worthwhile? There’s a 5% prepayment option everywhere anyway, which we would also include. Unfortunately, I don’t know enough about alternatives. Is it worthwhile to take advantage of subsidies, or is that even possible with the planned house size/type/amount? Well, better stick to the core question of this point: if financing, then a long fixed interest rate desirable given current times or rather pursue other plans?
4.) Alternatives if 2) and 3) are doomed to fail...
Instead of building, is it better to buy a house? Is that worthwhile?
I have to say, over the last six months we have looked at about 10 properties and with one we had to really consider it, but decided against it. Basically, you can say the properties we liked cost between €170k and €250k and all had no great values (e.g. energy certificate) and quite a bit of renovation or refurbishment needed. Ok, if you want to spend as little as possible and can live in houses built in 1970 (which was the case for almost all we saw) and with partly 15-25 year old heating systems, partly no RCD in the electrical installation, you could say we could get a property around €200k-250k that you could live in. But... honestly... don’t you get caught up in renovation mania then? Doesn’t something break all the time? Don’t you have to do new things again and again? Keywords: new insulation, heating, roof, this, that, etc.? After 10 years of living in a 1970 house, isn’t it possible you end up with an amount that would have been enough for a new build anyway? You know what I mean... or surely it’s already obvious to everyone, but as I said, I am relatively new to all this...
That’s it for now.
I appreciate any help, be it criticism, suggestions, the naked truth, or alternatives.
Please bring it on.
Thanks a lot in advance.
Best regards
Hausen