In the beginning, there is an idea

Hello,

I have already read a few times here in the forum and have now registered.

I definitely plan to build a house in the next few years. However, I have not really dealt with the topic yet. Now, the currently low interest rate gives me the feeling that I am missing a good opportunity. Therefore, I wonder whether I should just start planning now. Ultimately, every month I invest in my own house is a month gained.

I would like to build on my parents' property. These costs would thus be eliminated. The house I like costs about 150,000 euros. Unfortunately, I cannot say exactly at the moment. I am now thinking of taking out a loan of about 170,000-180,000 euros. Unfortunately, equity is currently only available to a limited extent.

Since, as I said, I do not have to buy land, I consider the loan amount not too high. Therefore, the lack of equity does not deter me that much. The monthly installments for this loan amount should be manageable.

I am a civil servant and currently earn between 2,300 and 2,500 euros net. My wife is still studying at the moment. Next year, her salary will probably be added. But even with just my salary, the matter seems doable to me.

What do you say? Should I save a bit more or rather put my idea into action quickly?

Unfortunately, I also don’t know how to best approach my plan now. What would be the first steps? Probably go to the bank and calculate the matter first.

At the moment, I pay 639 euros warm rent. In addition, I can save about 500 euros per month. That is practically the amount that would be available monthly.

According to online calculators, my loan amount with a 10-year fixed interest rate and 2% repayment is already available for 800-900 euros per month with an acceptable term.

Am I forgetting something? Is my idea too naive? I am somehow unsure, since building a house is a big step.

Thank you very much in advance!!!!

Additional costs

What do you think? Should I save a bit more or rather quickly put my idea into action?

At the moment, I pay 639 euros for rent including utilities. In addition, I can save about 500 euros per month. That is practically the amount that would be available per month.

According to online calculators, my loan amount with 10 years fixed interest and 2% repayment would already be between 800-900 euros per month with an acceptable term.

Am I forgetting something? Is my idea too naive? I am somehow unsure, since building a house is a big step.

Many thanks in advance!!!!

Hello BARBQ,

At the moment, two positive factors speak in favor of your future plans. On the one hand, your own plot of land and on the other hand, your civil service status. From our experience, that would already be enough for banks to approve you the corresponding loan. Perhaps with the restriction that you will have to pledge not only the house but also the land as security. It is not possible otherwise anyway!

However, what you must not forget are the additional construction costs. Depending on the building project, this can easily be between 20,000 and 30,000 euros. Additional construction costs include the following items:

- Surveying services
- Connection to the public network (gas, water, electricity)
- Depending on the builder, the excavation and earthmoving work
- Property tax
- Notary fees
- etc.

As a rule, the so-called building and additional costs are not financed by banks. A clarifying conversation at your house bank should provide more transparency here. There are also differences in this regard.

Nevertheless, I would recommend that you start saving. Just also think about the fact that you might need new furniture, a new kitchen, or other furnishings (lighting, lamps, etc.). Depending on the size and equipment, a kitchen can quickly cost over 20,000 euros. These items are definitely not covered by the construction financing.

What should also be considered in all house planning is the issue of children. When and how many children do you want? Do you have concrete plans? Here, too, a certain financial framework should always be calculated. It sounds very planned and theoretical, but in the worst case your wife might not be able to work for several years and the possibly calculated salary from her suddenly is missing!

Otherwise, I would (subjective perception) start building as early as possible, based on all the factors I mentioned. Our personal opinion is that this is a very important step at the moment: to already have a substantial part of your/your pensions. Just think about the elimination of monthly rent! Also, rental costs will develop negatively over the next 20-30 years.

Discuss the matter also with your parents, they always have good ideas (;)) and of course with your bank or financing advisor. It is best to get several opinions here.

We wish you good luck!