Is it still too early for house construction financing?

Hello, I am 24 (plumber) and my wife 23 (nurse) want to realize our dream and build a beautiful house. For this we have estimated about 200,000 - 250,000 € including land and new furniture. Our equity amounts to 16,000 which we saved in about one year. Our joint income is about 3,000€ net. We have 2 building savings contracts of 10,000€ each; when they are full, the next 2 will start also with 10,000€. We will get a financing offer next week, I will present it here then. My questions: Are we on a good path or is it still too early?? We would have to look for land 27km further because prices in Kaiserslautern are very high and my wife would have to drive 27km every day. What would you suggest: rather expensive land or accept the 27km and cheap land?? We imagined a monthly rate of about 800€, is that possible??? Which financing would suit us???

Hello Viti,

With total costs of 250,000 EUR and 16,000 EUR equity contribution, the monthly financing rate is currently about 1,035 EUR (KfW funds from the home ownership program are already included).

With the stated 800 EUR, you are therefore not quite covering these total costs. Nevertheless, this is just under 33% of your available income.

Perhaps you could save something through personal contributions to the construction?

I consider the current time for a real estate purchase very interesting due to the current interest and market price levels.

Furthermore, I consider an investment of the available equity capital in your own property, given the current economic situation in Europe, to be security-oriented.

Best regards

M. Thiemann

I think that €250,000 is overestimated but better to have too much in the end than too little.

You would be the first to have that happen to them

Today our insurance advisor was on site and said the following: The bank would finance a maximum of €200,000. We would have to complete a building savings contract so that we start with €40,000 equity. We are still in the planning phase, so he cannot tell us the conditions yet. It depends on many factors.

Since when does an insurance agent provide binding bank information? But he can already sell you a building savings contract, right?

He is from the Deutsche Vermögensberatung, helped my parents and my sister with financing, and he not only does insurance but also financing offers. We have had a building savings contract for a long time. It would be a sensible solution to start with the building savings contract as equity.