Is equity capital large enough? Building a single-family house + partial transfer registration of the land

Hello,

there is the possibility to buy a plot of land (220m²) behind my parents' property and to have about 450m² transferred from my parents to build on the newly formed plot. Currently, it is very difficult for us to even assess whether we can afford the whole thing at all. This topic therefore serves first of all "as a rough estimate" and to form an opinion. Please excuse that the information about the loan and construction costs are roughly estimated. Planned is a single-family house for 2 children and a garage. The value of €400,000 comes from comparable construction projects in the family and acquaintances circle.

Thank you very much for your feedback. We hope to be able to make an assessment in: "Yes, it is affordable and realistic for us" or "Better to save more and accumulate equity."

General information about you:

Who are you?
How old are you?	He: 25; She: 24
Are there children?	No
Are children planned?	Yes, 2
What do you do professionally?	Designer (Mechanical/Automotive Engineering) & Industrial clerk (soon with B.Sc. degree)
Are you employed, self-employed, retired, housewife, househusband etc...?	both permanently employed
How many hours do you work?	35h & 38h

Income and asset situation:

What income do you have? (gross/net)?	He: €2500 net; She: €1800 net
How much child benefit do you receive?	--
Other transfer payments like parental allowance, sick pay, etc...?	--
How much equity do you have?	€55,000 + transfer of "partial" plot (explanation see below)
How much equity do you want to invest in the house project?	almost 100%, minus "emergency reserve" for absolutely unforeseen expenses outside of house construction

Housing costs:

current cold rent	--
current warm rent	--
additional costs (current apartment in parents' house)	€180
telephone, internet, mobile phone	€50

Mobility costs:

Car 1

monthly ticket for bus and train (also for the children!)	--
car loan (or savings rate for new car)	--
insurance	€65
taxes	€12
fuel	€60
repairs	€50
other	--

Car 2

monthly ticket for bus and train (also for the children!)	--
car loan (or savings rate for new car)	--
insurance	€50
taxes	€20
fuel	€60
repairs	€50
other	--

Insurance costs:

private health insurance (also supplementary insurance, daily sickness allowance etc.)	€18
liability insurance (including pets)	€6
capital or term life insurance	--
pension insurance (also Riester, Rürup, etc.)	€100
disability insurance	€64 (€38 + €26)
accident insurance	€13
household insurance	€13
legal expenses insurance	€10
other insurances (e.g. travel insurance, funeral insurance)	--

Living expenses:

groceries	€350
restaurant expenses	€100
personal care/drugstore	€50
pets (food, vet, medicine, stable costs)	--
medicines	--
clothing	€50
furniture	--
daycare/school fees (and meal money)	€295 tuition fees (until 02/2022)
tutoring	--
school supplies and books	--
club fees/fitness studio	€35
babysitter	--
toys	--
cleaning	--
TV/video/audio/CDs/DVDs	€6
tickets (football, cinema, concerts etc.)	--
donations	--
other	--

Savings

vacation
house
retirement provision
hobbies / gifts
other	both together about €2100 per month

Other expenses

support payments	-
loans	-
other	-
Was anything forgotten?	-

Income and expenditure totals:

total income	approx. €4300
total expenses	€1700
balance	€2600
of which sum cold rent and dispensable savings

General information about the property

How large is the plot	approx. 220m² to buy + approx. 450m² transfer from parents
What are the dimensions?
What is the standard land value?	€220/m²
new, old building (year built), house type	It would be newly built on the emerging plot
garages?
How big is the house? (living area / usable area)
What is the market value of the plot and house after completion?

Construction or purchase costs

land costs	approx. €49,000
development costs	?
ancillary acquisition costs (notary, court, property transfer tax, broker)	approx. €5,000 (surveying & plot division)
construction or purchase costs	roughly estimated: €400,000
renovation and/or refurbishment costs	-
additional construction costs	-
outdoor facilities/terrace	-
financing costs	-
total costs	€454,000

Necessary loan information

loan amount	?? Pay land in cash, but then 0€ equity?
type of loan
interest rate
interest rate fixation period
remaining debt at end of interest rate fixation
fictive total term until full repayment
initial repayment rate
monthly installment	approx. €1200
special repayment possible	Yes, through holiday & Christmas bonuses as well as bonus payments (approx. €3000-4000 per year)
repayment rate change possible?

Looks good, especially for the age. Pay for the property with equity, continue saving, and look for a house company. The loan = monthly net x 100 rule also fits. Salary will also increase. When the children come, it will get tight, so remember to build up some reserves beforehand or use repayment changes. And remember how the gifted portion of the property from the parents is handled in case of separation. Such matters are best settled amicably.

I think that could be doable. You are still young, have a long time to pay off, and your salaries will surely increase. When the children come, it might get a bit tight. But until then, the financial situation might already look better.

You cannot say much about the house costs like that. It depends on what you want in terms of size and features. Above all, the prices are currently continuously rising.

You should consider that a paid-off property also counts as equity. After all, the entire property will have a value of approximately 150,000 EUR, which ultimately is also your equity. And with a total volume of 550,000 EUR and 150,000 EUR equity, you will get a great interest rate.

Assuming you need a loan of 400,000 EUR and receive an interest rate of 1.1 % with a 15-year fixed interest period, you can start with a repayment rate of 2.5 % to reach the 1,200 EUR installment. At your age, an initial repayment of 2 % would also be possible. Possible subsidies and grants are not yet included here.

With that salary, you wouldn't have to worry here. I would arrange for a repayment rate change, repay properly at the beginning, and then possibly reduce it to 2 % when children arrive or something like that.

looks good, calculate seriously when building

You must understand one thing, with a salary it will be an almost impossible undertaking. Unless the woman goes back to work after a year, but then the topic of [Krippe] and costs will come up for you.