Land purchased, construction financing is pending.

Hello dear ones,

my husband and I have just bought a plot of land, or are about to. The information is with the real estate agent and the notary appointment will be within the next 2 weeks.

The plot itself costs about €130,000 including development fees and all fees (real estate transfer tax, agent) and notary costs (my husband has the exact figure in mind - he is the finance person in our household).

We have an appointment on Wednesday with our independent financial advisor to go through our financing finalization.

Now I wanted to ask you in advance how you see it, although I have to say that I am already slightly discouraged because I have read quite a bit here.

So we are married, have a 2-year-old son, equity of €70,000 and a small building savings contract of €12,000.
Possibly something could still come from the parents-in-law (€30,000-40,000), but I do not want to count on that right now as they are still in the process of selling a condominium.

I am still on parental leave until August but as a civil servant teacher will earn between €1500-1750 from September with a half position (depending on federal state - that is still a bit uncertain).
Then of course we have the child benefit and from my husband net €3300.

So together that makes just under €5200 net in the best case.

In general, we would like to plan only with my husband's salary and use my salary for further savings, etc. Since a second child is also planned, I prefer not to include my salary in the planning.
When I go back to work full-time (which could still take 5-7 years), my salary will be around €3300-3500 approximately.

Now we actually want to finance around €280,000-320,000 to be able to build here. I am also including a €50,000 KfW loan.

Do you think this is feasible with one salary, even though I have read that you can get €100,000 per €500 salary?
Does anyone know how it is with loans for civil servants? You always hear that banks prefer to hand over their loans?

In general, we would like to pay only €1100 per month so that with a second (soon planned) parental leave we are not living quite at the limit.

Regarding the equity, I have read that we could probably have saved more (if I think of other questioners and the answers to them). We have two moves behind us and the purchase of kitchen etc. and we have two cars, which we bought new 4 years ago. They are paid off but still often not much was left over. We got married and also had a nice celebration and trip. ;) That’s why it is only €60,000-70,000. In addition, because of the private health insurance, I always need a buffer of about €3000 in the account to be able to advance bills etc. The equity is therefore calculated so that we do not put everything into the bank loan.

A financing of approximately EUR 300,000, based on your husband's salary + child benefit, is basically unproblematic. Banks are happy to have clients like you (including your perspective as a civil servant teacher), as the majority of all homebuilders are in a worse financial situation than you. "Problematic" is rather the low repayment rate you have in mind. The installment should – depending on the exact financing amount – rather be around EUR 1300-1500. But even that is easily manageable with a normal lifestyle, provided there are no other financial burdens or your lifestyle requires a high monthly amount.

The repayment could possibly be adjusted - initially lower, then let it shoot up with the second high income :)

Then, of course, we have the child benefit and a net income of 3300€ from my husband.

Now we actually want to finance around 280,000-320,000€ to be able to build here. I also include a 50,000€ KfW loan.

In general, we would actually like to pay only 1100€ per month so that during a second (soon planned) parental leave, we are not completely at the limit of *living*.

Regarding the equity, I have read that we could have probably saved more (if I keep other questioners and their answers in mind). We have two moves and the purchase of a kitchen etc. behind us and own two cars that we bought new 4 years ago. They are paid off, but still often not much was left over. We got married and also had a nice celebration and trip. ;) That is why the equity is only 60,000-70,000€. In addition, I always need a buffer of about 3000€ in the account because of private insurance, so I can advance invoices etc. The equity is therefore calculated so that we do not put everything into the bank loan.

Hi Karla_Kolumna,

You don’t have to apologize for having lived earlier and set your priorities differently. ;)

Our starting situation with financing is similar. Since my wife’s salary is not necessarily always secure, we want to have the financing as much as possible run entirely through me. We found the following option for us:

We calculate (apart from the KfW loan, which anyway has a higher annuity over 20 years) generally with 6% (compare your 500 euros per 100,000). However, we have generally concluded our loans with the minimum repayment.
We will deposit the difference between the agreed rate and the 6% annuity monthly into a daily money account. This is then intended to serve as a buffer for unforeseen events (independent of the normal buffer). At the end of the year, the accumulated amount will be used as a special repayment for the loans so that overall we keep to the 6% annuity. If something unforeseen happens, we will not get into trouble this way.

But this option requires a lot of discipline. The amount must not be spent on a "urgently needed vacation." :p

Maybe this approach would be something for you too.

Well, I also see it rather uncritically regarding the requirements...

Keep calm, if not you then who! Can only advise you to get 3-4 offers.