House construction / Financing single-family house conceivable?

Hello everyone,

my wife and I dream of having our own house one day. Since it is currently very difficult/expensive to find a plot of land, we are registered on a kind of waiting list with our municipality. Now there is the possibility to purchase a plot, but by lottery. The plots in question are about 500 m² and should cost about 120,000€. If we are among the lucky ones and get a plot, I would appreciate your assessment whether financing or building a house (single-family house) is feasible, or if we should rather save more first.
Regarding the house construction costs, I estimate a house for about 300,000€ (I don’t know if that is realistic). Size 130/140 m², preferably garage, if not carport.

Here is a brief summary:

General information about you:

[*
He (35), She (35)
[*]1 child (5 years), no further children planned.
[*]Professionally, He IT, She graphic designer, both 40 hours per week.


Income and asset situation:


[*]He: 3100€ net + 13th salary (about 50% for retirement provisions) + one bonus (30% to 60% of the salary, but there was none this year)
[*]She: 1000€ net.
[*]How much child benefit is there: 204€
[*]How much equity do you have? – about 80,000€
[LIST]
[*]45,000€ in the account
[*]Building savings contract – 22,000€ (contract amount 50,000€, monthly rate 250€)
[*]Riester building savings – 13,000€ (contract amount 53,000€, monthly rate 162€)


[*]How much equity do you want to invest in the house project? – Everything except 5,000€ to 10,000€ as a buffer.

Expense situation:

Housing costs:

[*
Current cold rent – 960€
[*]Current warm rent – 1400€ (electricity, water, sewage, garbage fees, street cleaning, phone, internet, mobile phone included)


Mobility costs:


[*]Monthly ticket for bus and train (also for the child!) – 30€
[*]1 car – 190€ monthly (insurance, taxes, fuel, repairs/tires, ADAC included)


Insurance costs:


[*]About 40€ monthly (liability insurance, household insurance, legal protection insurance)
[*]Disability insurance – He (deducted directly from salary)


Living expenses:


[*]Daycare/school fees (and meals) – 170€
[*]Miscellaneous – 600€ (shopping, clothes, children’s courses, streaming services, …)


Savings:


[*]House – 300€ monthly


Other expenses:


[*]Vacation – 85€ monthly


Total income and expenses:


[*]Total income: 4300€
[*]Total expenses: 2765€
[*]Balance: 1485€
[*]Of which total cold rent and dispensable savings (e.g. savings rate for the house)
[LIST]
[*]960€ + 300€ = 1260€

Thank you very much for your opinions on this.

Hello, the rough estimates are probably too rough. You will certainly end up with a construction volume including the land in the range of 500-550k with a buffer. This will be manageable for the bank with your income but will enslave you for years. I estimate the income will not change much? Most likely with your wife by increasing the working hours.

Good evening, regarding the construction volume, I can only agree with . If we now assume total costs of 500,000 EUR, you should have no problem financing with your equity. Depending on whether you end up with an 80% or 90% financing, the interest rate should also be very attractive. Combined with a 15-20 year term and a monthly payment that lets you sleep peacefully, that sounds like a good plan.

I assume the income won't change much? Most likely with your wife due to an increase in hours

So far I have always had a salary increase of between 3 to 4% annually. Unfortunately, this year there was none at all because of Corona. I expect an increase of 100/200€ for me in the next two years. For my wife, rather not. If at all, no more than 100€ and that permanently. But yes, these are only assumptions or hopes.

Thanks so far for the answers.

How were your monthly costs determined?
Overall, it seems very low.
Mobility costs in particular seem low to me.

How were your monthly costs determined?
Overall, it seems very low.
Especially mobility costs seem low to me.

For this, I collected the expenses from the checking account for the last months/year and entered them into an Excel spreadsheet. I can say that we are reasonably frugal. For a long time, I was the sole earner; my wife has been working full-time for about a year.

I calculated the mobility costs as follows:

[*]Fuel - approx. €70 monthly (4 km to work)
[*]Insurance €500 (per year)
[*]ADAC membership - €110 (per year)
[*]Tax - €250 (per year)
[*]Roughly €500 (per year) for repairs + tires

~ €190 monthly.

A new (used) car is not included in the calculation.