House construction planned in 1-2 years!

Hello,

since I have absolutely no idea how building a house works and what it involves, as it is not something you do every day, I’ll just start here. We went to Südwesthaus and applied for a loan to see if the financing we had in mind could actually work. The financial advisor from DSW was a cooperation partner of Südwesthaus and showed us financing options with both 10 and 15 years terms. The calculation was done with an overstretched budget.

All total costs: 400,000
Equity: 100,000

Target total costs for later when we really want to build: 350,000

The result was a financing proposal (which we liked) with an interest rate of 1.60%, a repayment rate of 3.25% (around €1200) for a 15-year fixed interest period with special repayments. At the end of the 15 years without special repayments, we would have a remaining debt of about 135,000. With special repayments, we calculated that we might optimally manage to have everything fully paid off in 15 years, with +5 years for any remaining balance not making that much difference, I would say.

Is this financing okay and realistic?

Maybe think about two tranches; half as a 10-year solution, the other as a 20-year one. Brings more flexibility and more security.

Financing sounds good. I just don't understand the assumptions. Do you already have a plot of land? I find €350K for ancillary building costs + [Grundstück] + house difficult... especially if you are thinking three years into the future.

@ We did not want such a term, especially since the development of interest rates, etc. is impossible to predict. Therefore, 15 years. If we don't manage to pay off most of it + 5 years.

@ No, we do not have a property. What do you mean by thinking 3 years into the future?

No, we don’t have a plot of land. What do you mean by thinking 3 years into the future?

Quite simple, you are thinking about fixed interest rates of 10, 15, 20 years, but you don’t have land or anything.
That doesn’t help you at all, because if you still need 3 years to start now, then prices will increase. Building land is currently becoming scarce. Development takes 1-2 years for new land. In addition, raw material prices increase by 1.5-2% annually (I’m not 100% sure about the exact percentage right now).

That makes all planning void, unless you conclude a forward loan now.

@
I don't know how long we will need, but we are currently actively looking for a plot of land or everything from a single source from Südwesthaus. If something is found, the intention is to start immediately, especially since we are preparing to be ready for everything. So searching longer than 1, maximum 2 years is not planned. Maybe I expressed myself a bit unclearly. There are a few building plots, but most of them are privately owned and no one wants to sell. We are looking at what is available. It is also quite possible that we will find something tomorrow and the planning with the architect will start immediately.

I know what you mean but we are determined and we don't want to live where we currently are for much longer. We ourselves are not really under time pressure but would like to move into a home as early as possible. Returns or increases in value later don't interest us either. The only thing we are interested in is peace from other people!

The thing with the building plots is true, most of them are already taken but I tell myself things happen as they are meant to happen and most of what is sold out, at least in our area, has a poor location which would be uninteresting for us in case of availability anyway. A quiet location with connection to the nearest big city is the goal.