House - Which loan to take?

Dear forum members,


we are planning to build a solid single-family house at the beginning of 2015. Living area 200m2 on 800m2 plot. House cost (Kfw 70) incl. double garage: 300k€


Total construction cost all in: 500k€, equity: 180k€ --> loan amount: 320k€, no other loans running


Can you briefly look over the following list of income / expenses as well as house costs?


Age man: 33


Age woman: 33


Children: 2 (10 and 5 years old)


Salary man 3700€ (DAX company – bonus payments of approx. 10k€/year are not considered)


Salary woman 1375€ (fixed-term contract, extended annually, permanent employment not possible due to project dependence)


Child benefit 368€


Income 5443€





Additional costs in the house 300 (currently 200 in the apartment)


Electricity 45


Medication 20


Groceries + hygiene 475


Car 200


Fuel 150


Public transport 100


Retirement provision 450


GEZ 18


Phone 50


Insurance 50


Leisure 50


Miscellaneous 150


Clothing 150


Vacation 300


Savings 200


Total expenses: 2708


Delta income / expenses: approx. + 2700€/month


We aim for a loan installment of 1500€/month (interest rate fixed for 20 years) – repayment 2.5-3%, term approx. 26 years.


We are of the opinion that we can financially manage the project well (we have kept a household book for about 5 years and therefore know exactly what we spend).


Many acquaintances / colleagues, however, frown when we tell them about the project – too big, too expensive, etc. (however, they all have smaller houses (approx. 150m2 with comparatively simple equipment, but good monthly income of approx. 5-6k€)).


Is this just envy or is there really something to it?


Thank you in advance for your assessment.


Best regards


Mike

Insurance is priced too cheaply. For the house, there is also residential building insurance and possibly household contents insurance.

Whether the bank accepts a fixed-term employment contract you have to arrange with the bank.

I am skeptical about the price for the house. Are you sure that all construction incidental costs are included?

Under house, ~160sqm living space (Energy Saving Ordinance) is already more expensive without construction incidental costs.

hello emer,

thank you for your feedback. I adjust insurances to 100 euros per month.
the 300k eur do not yet include incidental construction costs, but these are included in the total amount mentioned for the construction project.

Dear forum members,

what is your opinion on the above-mentioned situation? Is anyone in a similar situation?

Regards
Mike

I can't say anything about the construction costs. The loan amount in relation to equity and income fits. Despite having 2 children, you have managed to save quite a bit.

Is it envy? Maybe. Not everyone gets the chance to build for 500k. I don't know what is usual in your region. 200 sqm is also a very large area. Not everyone likes that either.

I wouldn't drive myself crazy. If I were you, I would also ask intermediaries. You have an attractive starting position.

I also think that the starting situation is suitable. The only thing that could be a problem is your wife's fixed-term contract. However, it is quite possible that a bank will approve the loan even without your wife's income, since you earn very well. I think it will work out.