Is our dream of a house falling apart?

Hello dear forum community,

my husband and I have the dream of building a house, and now that the plans are becoming more concrete, it looks more and more like we unfortunately won’t be able to fulfill this dream...

My husband and I both work full-time.
- He (28), net income approx. €1,850 (12.5 salaries/year + annual bonus of approx. €1,500)
- I (25), net income approx. €1,800 (12 salaries/year)
Our total income is therefore only €3,650/month.

Deductible are child support for my husband in the amount of €300/month, and my private health insurance of €180/month. That leaves only €3,170 income.

We did a bit of calculation and think that after deducting fixed costs we can only afford a monthly payment of €800. It is already planned that we can manage this even if we have a child and I work part-time for a while (in the current situation we could afford a higher rate). I should also mention that I am a civil servant, and with a child my salary will also increase by approx. €200 per month, and my salary will also rise somewhat over the years regardless of the child (only small salary increases, but every little bit helps), unfortunately my husband’s salary will not increase much anymore; however, the child support will eventually stop, but that will take some time (child is 8).

We bring about €65,000 in equity. I know, not that much...

We plan a single-family house in 2015 in northern Rhineland-Palatinate, solid construction, approx. 150 m² living space, without a basement, with a double garage (which can possibly be built later). Details are not yet set, we still have to see if our dream is even remotely affordable.

A plot of land is in sight, approx. 650 m², cost €32,000 (cheap area).

Unfortunately, I really can’t estimate how expensive the building project will be. When I read across the forum here, I’m shocked by the prices… however, we know two couples in the area who built here about 2 and 4 years ago for €250,000 (with a lot of own work) and €300,000 (including everything). I can’t at all estimate how expensive the building project will be, but I think we should be roughly in the range of our acquaintances?! But the more I browse the internet, the more unrealistic it seems that we can afford a house. Before I get too excited about our own four walls, I would like to ask for your advice. Then I can accept it earlier if it doesn’t work out, instead of breaking down in tears at the bank.

Thanks!

Since we are also building in Rheinland Pfalz in a rather rural area, I can tell you that the prices quoted here are not comparable at all to those in metropolitan areas. Our construction costs are below €1700 per m², solid construction, flat roof, high-quality fittings including all ancillary costs!

We built in expensive Bavaria with a nationwide (prefabricated house) provider and paid about €210,000 for approximately 150 sqm of living space including the upgrade to the "standard house." In addition, there were also flooring and painting works. But there you do have a range of options.

The real question is, as a family with one child and not much income, do you really need a house with 150 sqm? We have a total of 3 children's rooms (because we also have visiting children), which is why our house became larger. I could have easily managed with less. So 120 sqm, well laid out, can also be spacious.

Too little income?
I really had to laugh a bit there. We have only one income and significantly less than you, TE, and practically no equity (only the incidental purchase costs) and therefore financed 100%. It works without any problems and there is even enough left over to make the second (!) maximum special repayment now after 2.5 years. However, it was a used property that is being renovated with a lot of personal effort. With a renovation loan, it was still 210k euros of credit (and 7,000 incidental costs that we covered ourselves).
Getting the financing was not a problem at all; they even wanted to give us much more (we initially inquired about construction but ended up with a used property). It will be much less difficult for you.
You certainly don’t have to worry about the bank side, especially since you are civil servants.

But there is still the private lifestyle. We have no children and I definitely do not want any. With children, of course, costs increase significantly. Furthermore, we never go on vacation, don’t go out, etc., so the money is easily sufficient. If you have such expenses in the budget and don’t want to give them up, owning a house can become tighter. We also have only one car because I don’t drive (and don’t have to), and the incidental costs for the house are very low - including all insurance etc., about 100 euros per month. That can be more expensive elsewhere again.

Ultimately, I think the bank will give their okay in any case, but you have to calculate for yourselves whether the rate still fits. It’s best to stay in the range of the previous cold rent (we are even well below that). The bank will only apply flat rates, but your private living costs can vary significantly depending on habits.

Thank you for your answers, which are quite different. But it already helps to get a first impression. We will then get in touch with the bank and a few construction companies and see what they say. I would really be incredibly happy if it should work out... but I prefer to assume the "worst" for now.

It's not that we spontaneously decided to build because the timing is currently right. The idea has been there for a long time! Four years ago, it was announced in the local newspaper that there would be a new development area in our town in 2015/2016 and that you could already put your name on a list if you were interested. We did that back then and have been counting on building for the last few years. And now the time has come and now we have financial problems. Last year we experienced a serious stroke of fate that cost us a lot of money - otherwise, we would have had more equity and the loan wouldn’t have become so high. But now everything looks different. And our dream of life is bursting (maybe).

Yes, 150 m²... honestly, we see that as anything but large. We probably just grew up differently. We live in the countryside, the majority of people here have their own house. My parents’ house has 260 m² of living space + 110 m² basement + garage. The parents-in-law’s house is also about the same size. Of course, those were different times back then; nowadays, houses that big are really the exception, but that’s how we grew up, for us that is normal. We don’t want such a big house, but that’s why for us 150 m² is not "huge." When visiting model houses, we were sure that size was enough, but we don’t really want to go smaller. Maybe 140 m², but that would really be the limit for us! Our apartment that we currently live in already has 120 m².

By the way, it will be at least 2 children. At least if I really have a child someday. My husband already has one. So 2 children - 2 children's rooms. Even if his daughter is only here on weekends and partly during the holidays, she still has to sleep somewhere.

Social constraints? Well then: you get from the bank what you want, as long as the two salaries are declared under the table - what you make of it doesn’t matter to the banks anyway, if necessary they will seize or there will be a forced auction. And regarding the square meters: those are numbers you don’t necessarily always have to be guided by. A weekend kid’s room can also be a bit smaller.