House construction - how to calculate expenses

Well, at the moment everyone has about 500€ left per month, plus the two car loans of 250€ each. I actually want to buy the [Grundstück] first now and start building in 2 to 3 years. Is a loan for the [Grundstück] considered negative or positive as equity when applying for another loan for the house?

Regards, Ronny

Is a loan for the land counted as negative or positive equity when there is another loan for the house?

Best regards, Ronny

Hi!

Extremely negative, because the first priority security in the land register is lost. To avoid this, you would have to have the land and the later house construction financed by the same lender and discuss the valuation in advance.

Regards,
Tom.

Hello Ronny,

My girlfriend and I plan to build a house in 1 or 2 years, but we have already found a very good plot of land at a very good price that we want to have.

You should think that over again; your equity base is far too low, and you risk falling into the hands of so-called high-pressure salespeople. They are only interested in your financial situation as long as their in-house "financier" has arranged some form of financing – rarely a cheap one. Once you have signed a contract with such a person, your future is over before it has really begun; there will neither be funds for possible repairs (washing machine, car, etc.) nor savings possible.

plot price €40,000, fully developed (what exactly does that mean?)

That means exactly what the word says: the plot is fully developed, sewer, electricity, gas, and water are somewhere in the street. You write that an existing building still has to be demolished, so all connections are on the plot itself. However, that does not necessarily mean that you can reuse these connections. Depending on the age – for example, if clay pipes were still installed – you may have to renew the entire pipeline – here: connection from street to house. In the best case, that means €2,000 to €8,000-15,000 in the worst case for you.

house price approx. 125 sqm, solid construction with basement approx. €180,000 (we will have it calculated precisely) what other costs come up?

Demolition of the existing old building, depending on size and age between €30,000 and 50,000; then the typical incidental building costs €30,000 – depending on the usable connections on the plot, possibly higher.

There will still be nice plots in 4 years :D

Kind regards

Hello Ronny,

great that you are thinking about home ownership.
It's a pity that this seems to be a short-term idea – in other words, as Schneemann and TomTom have already pointed out, you obviously haven't saved anything in the past.

Which new facts have come up that convince you that you can afford financing? The already mentioned roughly €1,000/month for a 100 to 110% financing seems very optimistic to me.

In plain English – take the suggestions to heart: keep a household budget, save, resist taking out further consumer loans for, for example, a new TV, and so on (even zero-percent financing is recorded by [Schufa]).

Nevertheless, I am clearly of the opinion that your dream does NOT have to remain a dream, but not just yet – first try financing on a trial basis.

a) take around €1,300/month as house costs, from which you subtract your rent.
b) save this balance (at least) in the financing plan of a good building society (Wüstenrot, SchwäbischHall)
c) don’t let yourself be talked into an unrealistically high building savings sum, but have it calculated concretely which building savings sum will be eligible for allocation in 5-6 years.

The advantage of this approach? On the one hand, you have created real equity, on the other hand, you have a claim to a low-interest building society loan (make sure not to agree to high repayment rates), and in my opinion the most important thing – YOU know what financing feels like and can then calmly decide whether you want it or not.
Best regards
JoS