Is building a house possible with our savings and financing?

Hello :),

I (24) and my partner (21) are thinking about building a house. Does anyone know about creditworthiness? I would like to find out how much credit I/we can afford. We have a child together.

The following key data:

My net income: €1,800 - 2,000
My wife's net income: €1,500 (including child benefits)

I would calculate the following expenses:

€150 electricity (with air-water heat pump) <---Estimated
€50 water
€8 waste disposal
€35 phone
€80 road construction contributions/property tax
€18 broadcasting fee
€223 car installment loan (until December 2014)
€2 vehicle tax
€60 gasoline
€100 mobile phones (until July 2014, then only €50)
€55 home savings contract
€530 insurance
€100 house reserves
€50 car reserves
€150 daycare (with us)

Equity €5,000 Unfortunately :(
The plot would be gifted to us by my father (value €10,000) <---Living in the [AR***] of the world :D
Own contribution: Interior work (everything related to floors, ceilings, and walls such as painting, tiling, etc.)

My calculation:

Income: €3,300
Expenses: €1,611

Balance: €1,689 For credit and living

Is financing of about €200,000 feasible here? Or can I save myself the trip to the bank?

I look forward to every helpful answer :)

Best regards

That will be tight overall. €200,000 at 5% debt service (interest and repayment) amounts to €833 monthly. According to your calculation, about €850 would remain monthly for living expenses. Is that enough for you?

Or another approach: Your current rent excluding heating plus what you are currently saving monthly corresponds to the future debt service (that is, the €833). Is that correct? If it is less, you would have to restrict yourself in terms of your current lifestyle. Not to forget also the presumably higher operating costs of the new property.

Aside from that, the lenders have their own flat rates for living expenses and operating costs. Their calculation must, of course, also add up.

How do you both get to work when you live at the [Ar... der Welt]? 2€ vehicle tax? A car reserve of 50€ for tires and repairs is in my opinion never enough?

Building young has the advantage that you can save on rent and have a lot of time to repay, but especially at such a young age, it is questionable whether life won’t completely change again. New job, new partner, etc. We have also lived at the [AdW] for 5 years, in a large family-owned building. Although we both grew up in a small town, a village is something completely different, and we both want to live more centrally again.

I would rather save for a few more years. Then you will see where your careers develop and you will also have more equity. Nothing is worse than having to sell a house at the [AdW]. The money you put into it, you will never get back.

Much more interesting is the question of how to build a house on an undeveloped plot with €200,000. With a value of €10,000, I assume there's nothing there yet. 530 € insurance per MONTH? What exactly are you insuring yourselves against?

First of all, thanks for the quick help :)

So far we do not live in rental housing. That is why we want to slowly "cut the cord"! We have been a financial burden on our parents long enough! Is 850 € a realistic amount for 3 people?

I work in our town and my "wife" has a company car for which she bears no costs. And yes, it really is only 2 € tax per month! What amount should be set aside as reserves for the car? Of course, there are pros and cons when it comes to building at a young age! But at some point, you have to start! After all, we are already a family and want to finally "cut the cord". Unfortunately, there are no rental apartments here. Yes, that the low land price could become a problem (from the bank's side, I think so too)

The plot is already developed (10 € per square meter is the rate here).

Let's ask it the other way around. What do you want to build for 200,000 EUR? In my opinion, you can get about 100 sqm of living space for that, and I don't think you want to build that small, do you?