Is building a house possible with our salaries? Your opinions

Good morning,

my fiancée and I have been dealing with the topic of building a house for some time. First, some information about us:

Desired house concept:

We already have a few requirements and place value on quality:

- 150-170 sqm living space

- master bathroom and children’s bathroom, home office.

- 400-500 sqm flat plot

- Location: Wetteraukreis, within 50 km of Frankfurt am Main

Net household income

He: €2,300 (29, permanently employed, salary will increase in the coming years)

She: €2,300 (29, permanently employed)

Total income: €4,600

Expenses

Cold rent: €800

Additional costs: €150

Other monthly expenses (insurance, [GEZ], groceries, mobile phone, fitness, etc.)

Total expenses: €1,850

Monthly disposable income: €2,750

Equity: €10,000

Since we will still get married this year and then go on our honeymoon in January, our equity will initially be tied up.

Plan, idea:

We want to buy a home in the next few years. We currently live in Main-Taunus-Kreis but want to move back to our home area and build in Wetterau. We have roughly planned a construction start between 2020 and 2022.

Our current net household income is €4,600. We have no children but want some in the near future. I am aware that this decision will have a significant impact on the financing. Therefore, she will initially take one year of parental leave and then switch to part-time.

We have already spoken to several prefabricated house companies, as well as our house bank and an independent financier. For the total construction costs (land, house, ancillary costs) we were between €500k and €600k. Square meter prices in Wetterau are between €200 and €350 per sqm. Both financiers have offered us a credit limit of around €450k due to our employment situation. This would mean a repayment of about €1,500 with a fixed interest rate for 20 years and an effective annual interest rate of 2.24%. Loan term approximately 34 years.

Given our income and the plan to have the first child in the next 2 years, I am asking myself how much house we can afford. I have already had several conversations with parents and friends about this, and the general tenor was to take this step. However, after reading here in the forum for a while, I get the impression that calculations here are much more conservative and the whole matter is handled differently. Therefore, I would appreciate input from you.

Thank you very much for your time!

at 2000€/sqm, which is roughly estimated here, and 150sqm, you’re at 300k, without additional building costs, without furniture, without land, without buffer. Land is not getting cheaper, especially not around Ffm. If I deduct a buffer, you would have to buy land for 100,000 at 300€/sqm. That’s a towel, but a small one.

In short: I don’t see how the plan is supposed to work out.

If I were you, I would first buy a plot of land in the Wetterau, provided there is no building obligation on it. That is value-stable. Continue living cheaply in rented accommodation, wait for salary increases. Then recalculate in a few years. Build up as much equity as possible. The land helps a lot with that.

Edit: Aside from that, I consider the financing offered to you to be unhealthy. If a child comes and priorities change, it could get unpleasant.

Hello, you have €2,750 available and equity of 10k. So you’re saving for only 3 months or hardly at all? If the desire is so pressing, priorities must be shifted and €2k saved immediately each month. Reflect for yourself what it means to finance 600k with children and a part-time income when banks now say only 450k is possible. Where should the rest come from? Not to mention that the commute to work might become more expensive due to the distance? By the way, from my own experience, [HO] can be terminated by the employer. Especially if the employer wants to be nasty.

You are too poor to afford a house near [Frankfurt], especially not if you want high quality. In the sticks, your salary is good, but not there.

But don't worry, you'll find a bank that will give you 600k. Write again in 20 years about how it went...

Thank you for the very factual comments. I will exclude Crazychris's bracket here. What do you think is a good equity for such an amount? 100K?

You’re too poor to afford a house near Frankfurt, especially if you want high quality. In the middle of nowhere your salary is good, but just not there.

But don’t worry, you’ll find a bank that gives you 600k. Write again in 20 years about how it went...

What kind of person are you? Seems like your name is quite fitting...