House construction 2021 financing €500,000 opinion

Hmm, on the internet you can find

Thanks for all the messages, then we will probably save for another year and also include the 25,000€ we planned as a buffer in the financing. I think with 100k equity it should be easily doable, I know people who put down 15k equity for a place costing 250,000€.

On Immoscout you can find a "City Villa 4" from the company Allkauf Haus. The price is 460,000€ plus land. So you would add your 185,000€ for the land. That would be my reference point – not the 250,000€ place from your buddy...

So you won’t need 100,000€ equity, but 100,000€ additional in the project and currently also in the loan.

Thank you for all the messages, so we will probably save for another year and also include the €25,000 we planned as a buffer in the financing.

Saving for one year means €18,000 more money that you have. The part with the €25,000 is just a sleight of hand, it doesn't help. If you're unlucky, prices will rise and none of the €18,000 will be left. Building smaller would be appropriate. Do you really need four(!) toilets and three(!) showers??

Plot approx. €185,000 including incidental costs

Shell construction 249 sqm 2 stories / 6 rooms / 2 large bathrooms / 1 guest bathroom / no basement! €208,000 including kitchen valued at €12,000 as a free bonus / floor slab included.

There won’t be just €15,000 of additional construction incidental costs, rather €50,000 should be planned. The €15,000 will already be eaten up by earthworks.

We have estimated incidental excavation/construction costs at around €15,000.

Interior finishing we have roughly estimated at €90,000 +

We would not initially include garage and garden, since we will very likely receive an inheritance from my wife’s side within the next 5 years.

Total costs €498,000

And how should one imagine that? You want to build in 2021, it’s finished in 2022, and you’re tapping your feet in the summer in the building sand in front of the patio door waiting for grandma’s death?!

Plan €20,000 for the exterior works (excluding carport)

Floors/tiles/doors €15,000 including labor

Painting and small jobs €2,000

For equity prices and also my father-in-law will hardly charge anything.

Materials also cost money, even for equity contributions. For 10 doors, €5,000 can easily be incurred with decent standard doors... €10,000 for all flooring is ambitious... okay, I’m forgetting the equity labor..., nevertheless:

Friends and acquaintances can be registered via the tax office and we will not pay large amounts there either.

Friends probably have regular jobs. They first have to sacrifice their free time for you and won’t (be able to) jump to your call. In the end, you will be supplicants and have to expect that a helping hand will be twisted, have a confirmation, vacation, or other things to do. Then you will have to buy craftsmen to keep things moving, which you did not plan for.

You don’t just paint a house of this size over one weekend. If you rely heavily on equity labor for many trades, then the time factor plays a role. And that can become expensive. If there’s a backlog in summer (meaning, the scheduled screed layer from the village still goes on vacation), then all others and already planned friends will be pushed back. But they will not keep the whole following year free for you...

I think €100k equity should easily make it possible, I know people who built a place for €250,000 with even €15k equity.

€250,000 are not comparable to €500,000, or better calculated with €600,000.

Whether a shell construction with so much equity labor, which is interdependent, will be financed? No idea. But I know several, whether private or here in the forum, and I also think that one should tailor their house somewhat to their available budget, otherwise sleeping well with the monthly installment over several decades is very difficult.

Basically, generous 180 sqm should be enough for 4 people. Based on the equity, I recommend 160 sqm.

Thanks for all the messages, so we will probably save for another year and include the 25,000€ we planned as a buffer in the financing. I think with 100k equity it should be easily doable, I know people who managed to get a place for 250,000€ with only 15k equity.

That’s a naive calculation on your part. Equity is never a bad thing, but it’s not necessarily the decisive factor. The monthly income plays more of a role. 250k - 15k = 235k requirement Your volume, assuming size, is rather around 550k upward. 550k - 100k = 450k requirement. So almost double compared to your people. You can’t start planning anything with size Z. You have capital X and income Y. With that, you start and see what you can get. With government grants, you can squeeze out a few more square meters. The joke about “saving” right now is that for many it barely brings anything. Price increases of 3-4% per year are common and your annual savings rate of 18k almost entirely evaporates. Of course, no one can say that it will stay this way. Still, I know from friends that orders have by no means collapsed due to Corona. Rather the opposite.

Thank you for the answer. Then we will probably have to save for longer and wait until my wife can work more again, a smaller house is not an option for us because we have a large family and definitely need a guest room + separate bathroom and we are otherwise satisfied with the layout. But still, thank you for your opinion. Then we have to think again, maybe something can still be done here and there with the grandparents/parents regarding equity.

But I wonder how all the people do it who now don't have 100k equity and don't earn more than €4000 net per month, which is also not common for a family with a child. And how, in addition, they do a lot of it themselves, while many people have the house delivered ready to move in, even if it is significantly fewer square meters.