Is financing possible?

Hello everyone,

first of all, compliments to this great forum, very informative and helpful.

We are currently in the absolute orientation phase and have no concrete plans yet, but we want to start something of our own as soon as possible (after February 2011 see below).

First about our status quo (or prospectively from Feb 2011)

I am a teacher and a civil servant, earning a net monthly income of 3020 euros (private health insurance already deducted), additionally we receive child benefits twice (368) --> 3390 EURO.
My wife is currently on parental leave and has no income. Due to retraining, she will probably earn nothing or only a little from side activities until August 2013. So she does not play a role in the calculation at the moment, but will also earn from 2013/14.
We are currently living rent-free with my parents-in-law in our own apartment (75 sqm), which is, however, too small for our two children, born in 2007 & 2009 (they share a room) and me (office >4 sqm).
For this reason, we have to move out sooner or later.
Savings options are currently not available because I am in my trainee phase and am glad that we can live rent-free.

That’s the status quo so far. Now about our plans (without previous in-depth advice):

Plot of land: approx. 70000
House: 190000 (turnkey basic version/Schwörerhaus)
Basement 36000
Additional construction costs 30000

totals 326000 EUR

As a monthly installment, we have envisaged 1200 euros, with the option to increase it if my wife earns additional income.

Financing
There is no equity capital.
We want to include KFW funding programs and possibly state funding programs of RLP.

Compared to other presented plans in this forum, ours is very rudimentary. I still hope that someone will make sense of my explanations and dare to give an assessment of the situation.

So,

with 3000 € per month something like that is generally possible. But I have my doubts. You currently have the same income, live rent-free, and have no savings. That means to me, you also spend the 3000€ a month. If you now spend 1200€ on the construction, that money will be missing for living expenses. So it cannot work without a general change in your lifestyle. Furthermore, the 30000€ additional costs will not be enough (at least not in my experience).

So you should generally keep something like a household budget (sounds super old-fashioned but is the easiest way) to become aware of your financial needs.

Regards Straffrei

No, no, you misunderstood me. At the moment I am in the trainee teacher program and earn 1100 euros net....unfortunately, there is really nothing left over although I still see potential for savings here as well.

The situation I described applies from Feb 2011! Therefore, the status quo doesn’t really fit...well...but you can calculate quite accurately in advance for civil servants using salary calculators

It would be important to mention, by the way, that sooner or later we have to move out of the apartment due to lack of space and that we would have to pay at least 1000 euros in rent for a suitable apartment. Therefore, the decision in favor of owning a home is actually quite clear.

Ok! But I think you won't get by with 1200€. You should definitely plan more around 1500-1600€ and make sure you build up some savings before you start. There are always additional things, and in my assessment, the incidental costs are not enough anyway. Furthermore, I don't consider the house particularly affordable. We had a solid house with a basement freely planned by a developer for 210,000€. Of course, some other things were added, but it was already fairly well planned and included all the important things. So I would definitely look around again. Regards Straffrei

If I were you, I would first try to set aside at least 10% of the amount. Otherwise, you will get a pretty bad interest rate. And 1200€ is not enough for that. But you should actually get the amount. Alone because you are a civil servant. Although I’m not so sure about the amount. My friend and I have as much as you both together and only borrow 185,000€. That’s already a difference and we pay 860€ (interest rate fixed for 15 years) off. You just have to have it calculated. We just said that we also want to go on vacation.