Is the financing solid or rather calculated too tight?

Hello,

we (2 adults + 2 children) want to build a house in Hamburg.

Our rough financial plan looks as follows:

Plot including incidental costs and demolition: €190,000
House (140m² + cellar): €205,000 (incl. reserve: €10,000)
Additional construction costs: €35,000 (incl. reserve: €5,000)
Total costs: €430,000

The financing looks like this:
Equity: €90,000
KfW (energy): €50,000
KfW (homeownership): €75,000
Annuity loan: €215,000

For the kitchen and some new furniture, we have another €10,000 equity available.

I earn €3,150 net and also receive 1.25 salaries as holiday and Christmas bonuses. My wife currently receives €900 parental allowance until the end of September and €350 child benefit. At the end of this or beginning of next year, she will initially go back to work part-time (should be about €1,400 net minus €500 childcare).

We want to build a Kfw70 house and will therefore receive €108 per month from WK Hamburg for 10 years.

So far, we are not using Riester pensions, but could imagine taking the annuity loan as a residential Riester.

We plan with a total burden of about €1,400 in the first 3 years due to the interest-only start period at KfW and €1,800 afterwards.

We actually live rather frugally. We have saved the equity in 4 years since finishing our studies. We have no other loans or liabilities.

Is the whole thing realistic or is it calculated too tight?

Regards
Philipp

Sounds pretty solid overall. I just think the house with a basement is set way too low. What if a salary disappears? How secure is your job? 1800 is a lot when problems arise. Does that already include heating / insurance, etc? Maybe set a lower rate and agree on more special repayments.... gives leeway.

I would personally always assume only one salary, everything else is on top. Additionally, I am not a fan of [Wohnriester], as you will be noticeably charged again at the latest upon retirement.

Personally, I would always assume only one salary; everything else is a bonus. Besides, I am not a fan of Wohnriester, as at the latest upon retirement you will be noticeably charged again.

For this, I recommend reading the latest Finanztest – although the magazine is not really provider-friendly ;), it presents clear arguments in favor of Wohnriester in relation to deferred taxation.
Shortened result: the subsidies act as direct repayments significantly shortening the term and thus clearly outweigh the taxation in old age.
In the case of the thread opener, a considerable tax advantage should come into effect at the latest after his wife has resumed working. If this is also used for special repayments, advantages of more than €10,000 arise.
To me, the construction of the financing looks good, even though the acquisition costs seem somewhat low.
High expenditure discipline is obviously present – so from my point of view, it can start. Then I allow myself to point out that for KFW 153, proof of the actual values (70s house) is required. I hear about one or the other problem in this area, with the consequence that the conditions for the program are no longer met.

Kind regards
JoS
Advice – but fair!

What if a salary should disappear? How secure is your job? 1800 is a lot when problems arise...

My job is very secure (large German corporation). The likelihood is more that I will be promoted within the company in the next few years. But I don't want to count on that.

If there should be problems, then my wife could work full-time (plus changing tax class, etc. etc.) and that would help us get through for a while.

Otherwise, we want an amortizing loan, where we can adjust the repayment rate 2-3 times over the term to prepare for something like that.

Regarding construction costs: We will first meet with several general contractors to get more specific about the numbers.

Thanks already for the answers,
Philipp

Hello Phillip42,

your planning looks good. I would consider a Riester financing.

Certainly, there are tax advantages, shorter terms, and cost savings in favor of it now.

But in relation to what? There are financing models that are cheaper than a Riester financing. You can also generate tax advantages through Riester if you stick to retirement provision and do not use Riester for building.

I wish you a good advisor, it won’t be easy for them!

Best regards

Stein auf Stein