Is the construction project financeable? 580k loan for the North Hesse area

Hello,

we are planning to build a single-family Kfw 40 Plus house with 195m² area (knee wall 2m) in the Kassel area (approx. 5km to Wilhelmshöhe) (plot approx. 750m²). Realistic, the project?

[*]How old are you? 35, 32
[*]Are there children? None yet
[*]Are children planned? Yes, 2 children are planned in the next 1-3 years
[*]What do you do professionally? employed process manager, employed marketing
[*]How many hours do you work? currently 37.5 and 38

Income and asset situation:

[*]What income do you have? Net (2950 + 2650) total 5600 € (him: 13th + 14th salary, her 13th salary - not included)
[*]How much equity do you have? 366,000k€ (saved/earned by ourselves on the capital market)
[*]How much equity do you want to put into the house project? approx. 250,000€ (the rest should continue to "work" in the financial world)

Housing costs:

[*]current warm rent: 850 €
[*]electricity: 70 €

Mobility: 2 cars, both purchased outright (5 and 3 years old)

Living expenses:
Groceries, GEZ, gasoline, gifts, hardware store, internet, cell phone, personal liability insurance, clothing, beauty, food, restaurant, vacation, car insurance, etc.: 1800 €
(retirement provision: 1*100 +1*150 =250 € - already directly considered in the salary above)

Future house expenses: (photovoltaic power generation not considered)
Insurances (household contents, building insurance), property tax, water, sewage, electricity, waste disposal, term life insurance: 490 €
Maintenance reserves: 200€

Total income: 5,600 €
Total expenses: 3,410
Balance: 2,190€
Balance without rent, which will no longer apply: 3,040€

General information about the property:

[*]How big is the plot?: 750 sqm
[*]New build, single-family house
[*]Double garage (6m*9m)
[*]How big is the house?: 195 sqm living space

Construction or purchase costs:

[*]Purchase costs (house construction costs ready for occupancy, base plate, photovoltaic): 451,000€ (+ buffer 19,000€ = 470,000€)
[*]Additional construction costs (kitchen, earthworks, garage, terrace): 100,000€
[*]Plot: 230,000€ (incl. purchase incidental costs)
[*]Buffer: 30,000€

Cost summary:

[*]Total costs: 830,000 €
[*]Deductible equity: 250,000 €
[*]Financing amount: 580 k€ (without consideration of KfW40 Plus subsidy of 37,500€)

We have financing offers at 1.28% interest with 1,861€/month with 20 years fixed interest.
Your opinions on this? Are we overextending ourselves? Are there any missing infos?

Thanks and regards
Siggi

That would be too much for me, especially since I suspect that with 2 children you won't both be working full-time anymore. But everyone has a different feeling about that.

Why are you building so big?

Since you managed to save over 360k, the construction should be no problem!

It depends on how much you want to pay monthly. You could currently afford the money, but as soon as a child comes, the income decreases by almost €1000 per month, and the costs increase! Does the woman want to go back to work immediately afterwards?

Well, we did it like this, or rather, we have 2 children with 1.5 years apart, so that a relatively large portion of the income before the children is taken into account for the 2nd child + €300 bonus for 2 children, thus good parental allowance again. When the youngest turned 1, my wife went back to work.

Nevertheless, we planned the financing so that it would be affordable with just one income. (For you, the financing should be flexible! Because of the variables that are still coming!)

But if I were you, I would first get an appraisal of the property. If you subtract the kitchen and the incidental purchase costs for the land, the pure land price, construction costs, and ancillary construction costs together probably sum up to around €750,000-780,000. And you have to see whether the house is worth €580,000 at the bank, because currently there are too large differences "on the market" and "at the bank." (Sometimes a 30-40% difference!)

So if I should do an appraisal here, let me know. Or just click on the "advertisement" here ;)

Groceries, GEZ, gasoline, gifts, hardware store, internet, mobile phone, personal liability insurance, clothing, beauty, food, restaurant, vacation, car insurance, etc.: 1800 €

All together? 1800€ including vacation, hardware store and clothing from now on?! And gasoline… you only drive on weekends?
I'll put it this way: very good equity. But if you then build a bigger house from it, the equity is hardly worth anything anymore and the financing is no longer secure.

Currently, if your wife goes into TZ, it will always be a tight fit. You always have to keep the depot in mind.