Is our new building realistically financeable?

2021-03-08 09:24:34

Good morning :)
It is in India. And local currency. it inflation..
Since it is a new building, no further investments are expected. My father takes care of everything, which is why there is the "lower rent" because he has a well-known tenant living there. It is too much stress to change anything here and we leave it as is.

The apartment sale is not an option (I mean for personal reasons, not that it is impossible). I would rather spend less here if necessary than change the situation there.....

2021-03-08 16:28:14

That's a matter of perspective. Do you only look for risks, or do you look to the future with optimism? I was about your age when I bought/built a house. I'm alone, with two children. I have about half the loan amount and a little more than half of your household income. I dared to do it despite very little equity. And I think that was the right decision. Of course, I was counting on staying healthy and having a job (MINT). I already work full-time and larger salary increases are not to be expected (TV-L). I'm still optimistic: I can manage it! But a bit of confidence is necessary. I would dare. Make sure to reduce to what you need, not what you want.

2021-03-08 17:43:17

There seem to be two camps in this forum on the topic of financing.. For some, a property must be paid off by retirement, for others not..

We are also rooted abroad as a family and are building the house for now and not for 30 years from now. We won’t stay here that long. Either the house is paid off and sold or it’s not paid off yet and sold, what difference does that make?

Can you at least reserve the plot to better narrow down with some house providers what options are available to you and how much your targeted house would cost? Or you buy the plot and start paying it off. It’s basically a form of forced savings and is also considered equity when the house construction starts.

We bought the plot in 2019 and have currently paid off 40% of it. It will still take a while before construction starts and we continue to pay it down.

With 6700 net + 2 x 13/14 salary, this will definitely work, even if the washing machine breaks down at some point..

2021-03-08 18:55:05

It feels like there are also 2 camps in this forum on the topic of financing.. For some, a property must be fully paid off by retirement, for others not..

I think these camps are often exaggerated. In the end, finances also need to work during retirement. It is simply significantly less than the current net income, even though in retirement you have much more time to do things (!) and are initially still fit enough. Inflation will likely outpace pension increases, and in the future pensions will also be fully taxed, so much less will remain than the pension statement suggests each year. You must not be too optimistic with your calculations, otherwise you will live in old age just for the house or sell it. If you intend to sell it anyway, no problem. However, a large portion see their home as a form of retirement provision, and then it must not become a burden because you have a 30-year-old worn-out property and a loan.

2021-03-08 19:10:55

I think the shortages are often exaggerated. Ultimately, the finances have to work out in retirement as well. It’s simply significantly less than the current net income, even though you have much more time to do things in retirement (!) and are initially still fit enough. Inflation will tend to be higher than the pension increase, and in the future, pensions will also have to be fully taxed, so much less will remain than the annual pension statement suggests. You must not be too optimistic in your calculations; otherwise, you will only live for the house in old age or have to sell it. If you plan to sell it anyway, no problem. However, a large portion consider their home as retirement provision, and then it must not become a burden because they have a 30-year-old worn-down property and a loan.

For example, at 30, I wasn’t aware that the amount on the pension notice is still taxed and that health insurance is deducted from it. One simply doesn’t deal with it at that age, and if you previously earned three to four times as much and then, after deducting all positions, only have around a 1xxx€ amount left, I want to see how you’re supposed to pay off a house with that. Possibly, one might want or have to retire earlier, which would come with a double-digit deduction, and then you can gladly live in a rental without a balcony. That makes it all the more important to be finished a few years before retirement to build up an additional cushion in order to enjoy the work-free time in retirement. But that doesn’t mean I want to be carried out of the house feet first. If we can no longer manage the house in old age, then it will be sold, and we will look for a small condominium on the ground floor with a small garden.

2021-03-08 19:14:41

There are even three camps. You forgot the camp that says every financing should be finished after 20 years. The fact that you are only 50 years old then is ignored.

It feels like there are also 2 camps here in the forum on the topic of financing.. For some, a property must be paid off by retirement, for others not..

We are also rooted abroad as a family and are building the house for now and not for in 30 years. We won’t stay here that long. Either the house is paid off and sold or it is not yet paid off and sold, what difference does that make?

Can you at least reserve the plot to better narrow down with some house providers what would be an option for you and how much your targeted house would then cost? Or you buy the plot and already start paying it off. It’s basically a kind of forced savings and is also considered equity when house construction starts.

We bought the plot in 2019 and have already paid off 40% of it. Until house construction starts, it will take a while and payments will continue.

With 6700 net + 2 x 13/14 salary, it will definitely work even if a washing machine breaks at some point..

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Is our new building realistically financeable?

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