Is construction financing possible with our own capital?

moin moin

now we have also reached the end of the decision-making process. as some already said before, you don’t get far with cheap bait offers. but now we have found a company that could build us a house without any prior worries.
but as always, there is a catch somewhere. two months ago we were at our house bank to see if it would even be possible, which they confirmed without hesitation with a lower loan.

situation:
he (me) 35, engineer with permanent employment, 2060€/net net fixed salary
she 28, aspiring special education teacher (and trained curative educator), permanently fixed term for 1 year with 1500€/net fixed salary

building location: northern Germany

she always gets only annual contracts, but was never unemployed for longer than 1 month. this is usual in her industry. our house bank said that this can be a problem but can also be bypassed if it is usual in the industry. this was also confirmed to us by Interhyp.

equity capital in total at contract signing (the balance of all accounts): 70,000€
equity capital to be used in the total financing: 60,000€

10,000€ should not be included in any way in the financing, but is my reserve for other stuff. my car (A3 with full equipment) is paid off and 6 months old. resale value about ~22,000-25,000€, but selling is not an option. no other valuables of significant size.

loan structure:
land net 63,000€ + 7,000€ incidental costs (real estate transfer tax, notary, land registry) = 70,000€
city villa 125sqm with the usual extras 195,000€, including kitchen!
house connections 15,000€
all other incidental costs (flooring, wall work done by ourselves, KfW expert costs, external expert, authority fees, earthworks etc.) 15,000€
outdoor facilities: 0 euros, new development area only with construction roads, no one has done anything proper yet. should be financed from the leftover euros (reserve) and/or saved money next year (we currently have about 1500€ left over, with the house we will have about 700-800 left - very friendly/safe estimated)
reserve: 15,000€

overall I find that I rounded up more than sufficiently. I think that at the end of the construction project there will probably be 10,000 or more left, which I will then invest in a double carport.

----------------
310,000€ total costs
-60,000 equity
250,000€ loan amount
-50,000 KfW 70
-------
mortgage 200,000€

now the construction companies have of course already given us tips on how to finance.

an example:
1x KfW 50,000 with 1%
1x 50,000 mortgage loan with 10 years term and ~1% interest
both fully repaid in 10 years
1x 150,000€ loan with 0% repayment, interest only payment.
in 10 years you then have 150,000 left, which you can put into a new loan.

alternatively a large 25-year loan + KfW, however the interest rates simply have to fit for 25 years. I don’t believe that interest rates will be really high again in 10 years, since the lenders are currently just throwing out money without backing (ECB will release 1 trillion euros over the next 10 years).

do you think such a loan is doable? actually, everything depends only on my partner’s fixed term?! the equity was described by all construction companies as solid and ample, our monthly income can easily handle a loan of almost 1000€.

Your car is of little interest to the bank...
15K€ for work, wall and floor - could work - the house isn't that huge anyway. The floor is unproblematic?
Isn't KFW at 0.85% with KFW70?
Your 10-year calculation is very risky... I wouldn't do it - it could just as well be that inflation picks up and interest rates end up at 6%. 15 years should be doable at the moment. With a bit more effort, you can get below 80% loan-to-value - so about 1.6% for 15 years.
I'm not really clear on what vulnerable loans cost - or whether you can even get something like that without a building savings contract or life insurance - as a bank, I wouldn't grant you that initially.

Baja we also take a complete financing of 200,000 euros and 25 years. but then with a slight residual debt and possible special repayments. But what about the [KfW] in 10 years?

The KFW is then somewhere around 34,000 euros remaining debt - even with an increase to 6%, the burden is ultimately still reasonable - at least it should be.

Calculate that for yourself - you will be surprised how the monthly amount then looks.

Otherwise, minimize the risk with special repayments.

KFW70 is at 1% ;)

So for me, Kfw70 (153) is at 0.85% ... no idea where you got your data from.

So for me, KFW70 (153) is at 0.85% ... no idea where you got your data from.

This was reduced from 1% to 0.85% on 19.03. He doesn't seem to be up to date yet. After completing our financing, I also didn't check the KfW conditions weekly anymore.