House construction planning and construction financing 2018

Hello dear forum,

I don't know if I am really in the right place here but I will write a few lines anyway.

I married my girlfriend last month, we are both 24 years old, we have been living together renting for 3 years and want to build our own house in 2018. We are both currently employed full-time, I for 8 years and she for 2 years, and we both have an income of about €1700 net. We have great respect for the house building project and to avoid unpleasant surprises we want to do as much as possible right and therefore really use the available time sensibly for planning and coordination. And regarding this my first question:

- How and where should one get information to build as cost-effectively as possible? What measures should one take in advance as far as possible?

We have no concrete ideas yet about what our house should look like and whether it should be a prefabricated house, a shell house or a turnkey house. I am relatively "unhandy", I can help everywhere but I need instructions from a professional, I lack the necessary knowledge for managing it myself. However, we have some craftsmen in the family circle.

Another point is of course the money and financing, below is the current situation. We already bought a fully developed plot of land with 666 m² at the beginning of this year, which was paid "in cash", so without a loan or similar. We pay €280 cold rent and both save about €500 - 550 per month. Together we currently have the following savings:

Savings: approx. €26,000
Savings account: €2,000
Building society savings contract (100,000er): €10,640 (paid in)
Building society savings contract (10,000er): approx. €4,000 (paid in)

In addition, my mother-in-law supports us with about €50,000 for the house build. That makes a total current sum of approx. €90,000 and by 2018 it should be about €100,000 that we have "saved".

- How do you see our situation regarding future construction financing and our income? My wife will not work full-time forever, the desire for children is there and is possibly to be fulfilled in 2018/2019. We have no high demands; it should be a sufficient single-family house, but certain facilities should be of higher quality, e.g.: kitchen, bed, couch, etc.
- I calculate about €300,000 for the house. It is difficult to give a judgment here, since you of course do not know all the conditions, but do you think this amount is realistic?
- Should we already do something with our saved money to save money in the long term? At the moment it is "only" in the savings passbook.

I would be glad if one or the other could give me some advice here.

Thank you very much.

Hi,
that doesn't sound all that bad.
Do I understand correctly that the total net amount is 3,400? You already have a plot of land and around 100k in equity (including an allocation-ready home savings contract).

You should be clear about what you need: number of rooms, total size, prefabricated or solid construction.
It helps to read and educate yourself here. Visit model homes and so on.
Very important, read the development plan for your plot of land, or is there none? This is usually where the first restrictions lie in wait.

Have fun reading and asking questions here! And welcome

Hello Robson,

thank you very much for your reply. Exactly, 3,400 is the total net amount, but of course this will not remain the case forever, since sooner or later (2018/2019) we want children, then my wife will no longer work full-time.

There is a development plan, but it is very loose and actually allows all common house types or designs.

Thank you for the encouraging reply

There is a development plan, but it is very loose and basically allows all common house types or designs.

That's already good, but there can still be small "pitfalls" in it. At first, I thought everything was really easy for us too, then the professional looks at it and says that I still have numerous things to consider (but these have nothing to do with the design, rather they are aspects around it).

What are your plans once one or two children are there? Will your wife continue to work (part-time?)? Or will you cut back and your wife work full-time? Length of parental leave? Amount of parental allowance?

And what about the planned income development of the respective full earner? Are increases from the €1,700 net upwards firmly planned (e.g. through collectively agreed increases with higher age)?

You need to be aware that even with your certainly good equity, there will still be a considerable installment to pay. And since March of this year, banks have had to conduct income/expense calculations relatively strictly due to the so-called "residential real estate credit directive" – worst-case scenarios are also played through. If only one of the €1,700 incomes remains fully and the other spouse only has a part-time salary, it could become tight with one or two children in the bank’s household budget calculation (and possibly also in reality).

That reads quite well: how much is the property worth? The property is equity, I wouldn’t push the savings account to the limit, plus the kitchen, lamps, etc. also need to be paid for. If I were you, I would consult a financial advisor to explore the limits. Regards