homesweethome13
2013-12-08 19:52:43
- #1
I just got an offer from a bank. They would give us a total of 270,000 euros without equity (so 110%) at an interest rate of 4.05%, 2% repayment, 5% special repayment option per year. According to their calculation, that would be a monthly rate of 1,361 euros, with a residual debt of 158,000 euros. However, that would also be the maximum they would do.
So it really seems quite easy to get the money. There would be 1,623 left to live on, minus 300 for incidental costs leaves 1,323 for everything else. 400 euros already go to food for a family of three, leaving only 923 for petrol for 2 cars, which easily costs another 300 euros per month, leaving 623 for phone and TV, which with the broadcasting fee also consumes 100 euros, leaving 523. Since we don’t want to run around naked, we also need clothes, especially the little one who is growing and already takes 100 just for that, we go more on the ragged tour and 50 each is enough for us, which makes another 200 in the minus, leaving 323 for which I still have to insure us with the most basic things: car insurance 2 times 40 gone, rest 243 gone, household insurance 30 gone 233, legal protection 10 euros 223 left, then the little one also has to pay for daycare, food, etc., later school another 100 euros gone, rest 123.
Retirement provisions would have to be suspended, the 240 euros would no longer be possible there.
If anyone notices something essential for living that I have not listed, please say so.
But in my opinion, it would theoretically be just barely possible to manage this without equity, but it would be very risky as there would absolutely be no reserves and additionally the retirement provision is decimated. If it goes wrong, you have no house in old age, a rent to pay, and only a small supplementary pension in addition to the state pension. So that’s not how I would want to build.
Now let’s bring equity in to reduce interest and rate.
I have a question, since we don’t know how banks see equity.
12,000 euros in current accounts/savings books should clearly be equity.
Unit-linked life/pension insurance where there are already 20,000 euros in which you would get if you liquidated/sold.
5,000 euros in a building savings contract that is fully saved up but I don’t have the contract here (unfortunately it’s back home) because of building savings contract loan.
The question would be, do I now also have 37,000 euros of equity if I don’t use it for building? We want to keep it as a reserve except for the building savings contract and the pension insurance which we want to just pause in the building case. Or would the bank only consider 5,000 euros from the building saver as equity, which would not really change much.
I have no idea about construction costs, since we bought an old building and completely renovated it, but I can say something about the ongoing costs: You’re calculating a bit too "tight" regarding possible ongoing costs: What you forget are, for example, big items like property taxes, building liability insurance, monthly prepayment for the water utility, fees for the chimney sweep for a possible fireplace or for the maintenance of the gas boiler… etc.
Life insurance… and various other things, especially with your per capita income.
I find the financing volume already daring given your income, especially since additional costs always arise with a new build—what about more children?
Just so you know, we have slightly less income than you, but I am still not working again due to child-rearing and we financed less than half of your possible loan amount and yet I can already see the "bills flying out the window."