How much equity did you approximately have?

Hello, I am new here and we are still at the very beginning of our planning - we don’t even know 100% for sure whether we should build or not. I hold the view that paying rent is never better than paying off a loan and that you also benefit longer from a house if you have paid it off early. My husband and I estimate the total costs to be around 320,000-250,000 euros - we definitely cannot and do not want to spend more. Initially, we could provide about 50,000 euros. Do you think that "is enough"? Did you have more or less?

And I immediately have to add a question:

At the moment, we could repay a maximum of 1200 euros monthly - due to our professions, however, it can always be the case that we have such high income that 1800 euros or more would be realistic at times. Are there financing options that allow for such special repayments?

I hope this is not a completely stupid question, but we are at the very beginning of our considerations...

A similar question was also asked by "Sandra". Maybe just read the post one line further down.

Purely mathematically, the financing should work.

But one simply knows too little about your project and your lifestyle. I know people who should theoretically have 1,500 euros left over to pay off loans and still they can't manage to even pay off 700 euros. Personally, I would not do such financing, as the equity share would simply be too low for me. As a rule, it also does not stay with the planned construction sum, so very often additional financing is necessary.

Regards

Thank you for your reply. Sorry if there was already a similar post - these questions probably come up often. What amount of equity would you recommend?

In principle, it is possible to finance without equity at first. It's just (un-)proportionally expensive. The more equity you have, the cheaper the interest rates you have to pay and the easier it is to get the loan at all.

With a repayment of 1,200€/month, about 270,000€ should be financeable. If you have strongly (upward!!!) fluctuating income, you just have to make sure that special repayments are possible. But banks also charge for that!!!

So it's better to agree on small special repayments and invest the rest, then pay it off at the end of the fixed interest period. This also has the advantage that you may have money for "smaller" expenses in between.

Regards Andreas

The amount of equity I would advise you is hard to say.
With the intended loan amount, the financing is already planned to be fairly long-term so that the repayment installments are not too high.
Often, construction costs also increase significantly, so the loan amount increases again.
Such financing will then accompany you for a lifetime and thus also restrict you in many things that make life worth living.
One should just be aware of that.
Maybe you should simply try for a certain period to set aside the amount you would have to raise for a possible house financing (of course minus rent) and then see whether you can or want to live like that permanently.
Regarding your question about special repayments:
Unlimited repayment options exist with KfW loans; special repayments are negotiable with the house bank (usually 1% monthly repayment + 10% special repayments).

Regards

Unlimited repayment options are available for KfW loans,....

Regards

Unfortunately not for all as far as I know. For program 124 NO, for 153 YES