Is our dream of a house falling apart?

Thanks again for your response.

Societal pressures... hmm, maybe. For me, it has always been my dream from a young age to build a house later on. I also don’t know it any other way. Living in a rented place is not for me. Whether you can call that societal pressure?! Maybe. But I don’t find anything wrong with it. I’ve always wanted to build a house, it’s not a spontaneous thought, and yes, life circumstances certainly play a role because I don’t know it any other way. But I don’t want a house as a status symbol "Look at me," if that’s what you mean.

I wouldn’t have thought it would be so easy to get a loan from the bank when it’s clear from the start that it will be tight. I would have thought the banks check more thoroughly. I have always had the impression that banks are not particularly fond of foreclosures, especially since they mostly suffer losses from them. Therefore I thought they check more closely whether a loan is realistically serviceable. I work at the court – among other things, I also handle cases from the foreclosure department and often speak with banks about specific cases. Regarding this topic, I know my way around quite well. I hope, however, that I will be spared this in my private life.

Of course, a weekend child doesn’t need a big room. I never claimed that. But she has to sleep somewhere. She is here every weekend and half of the holidays.

We were in the neighboring town’s new development area yesterday afternoon and just spontaneously knocked on some doors and asked people. Most were really nice and helpful. According to them, most families paid 220,000 - 280,000 € for the house with everything included (ancillary costs, furnishings, land, house). Only one family was over 300,000 €. They also said, as Gunjun already mentioned, you can’t compare the prices here with prices elsewhere. We’ll see, I’ll arrange appointments with construction companies today and also talk to an architect (relative, costs us nothing). We’ll see what comes of it. This way we have an approximate value of what the project would cost us, maybe we can really do it for the prices mentioned above – then in my opinion our dream of a house would be achievable. Just 300,000 € and up… that won’t work.

Your approach is reasonable. You should not first go to the bank to find out how much you would get there, but rather you should first determine the need and then check whether and how you can manage it. In my opinion, banks give too much leeway; as long as the income is OK and there is some equity, they grant loans that are much too high with terms that are far too long. Longer than 25 years term is madness in my opinion! For 300k, you will definitely get a nice house built in the area!

Hello,

One should not first go to the bank to find out how much one would get there, but one should first determine the need in order to then check whether and how it can be managed.

It only makes sense the other way around

It makes little sense to want to realize dreams if the financing required for them cannot be managed or only under borderline conditions. Therefore, always check the financial possibilities first - via the house bank, independent financing broker, and currently also insurers. Only then does the potential builder know for sure whether their dream can be realized sustainably and if so, how much of the maximum available amount "X" they want to invest in the intended construction project. To clarify this, it also makes sense to order a self-disclosure via Schufa-Online (free of charge) and to take this - along with meaningful documents on income and ongoing obligations - to the financing discussions.

To first awaken needs and in the end have to realize that the needs remain in the realm of dreams is not only frustrating but also exhausting.

Rhenish regards

But it also doesn't make sense to plan a house and then realize that you can't finance it, so it does make sense to outline what is possible beforehand. The planner can then tell based on the amount what is feasible. Otherwise, you'll have a house planned for a lot of money that you can't even build.

That's why he said that you have to calculate what is possible. And yes, you can, if you are a bit realistic, at least get a rough estimate. If other parameters come into play where the bank might cause problems, e.g. self-employment, probation period, fixed-term contract or other loans etc.... then that's a different question. Then you should of course first check whether and if so, what is possible.

We did a bit of calculation and think that after deducting the fixed costs, we can only afford a monthly rate of €800.

In my opinion, a term longer than 25 years is madness!
For €300k you can definitely have a nice house built in the area!

But you really shouldn’t let yourself be talked into higher loans with 2% repayment. Otherwise, you could be trapped at the latest after the interest rate lock expires.

If you take into account the statement in the first post by , the above remarks from you contradict each other.

will need financing of €200,000 – probably even more. With a monthly annuity of €800, she will not be able to manage this within 25 years – the term will probably be between 30 and 35 years (just an estimate).
Also, with the second remark "repayment of max. 2%", the financing at the current interest rates will also run between 30 and 35 years.
Thus, you contradict yourself with your two statements ("longer than 25 years would be madness" and "don’t let yourself be talked into more than 2% repayment").

However – with a max. rate of €800 per month, will only be able to afford a repayment of 2% at most for a loan of €200,000 (+ X) anyway (unless she takes a very low interest rate lock). Which brings us back to a financing period of 30 to 35 years.