More complicated sales / construction project

Hello everyone,

after a long search I came across this nice portal. We have something a bit more complicated planned:

In 04.2016 we bought a condominium for €130,000, with over 100% financing (€148,000). We invested a lot due to personal use, installed a new kitchen, and now want to sell it after three years for about €200,000.

There are already interested parties since we posted it online as a test.
Provided the sale goes through, we would thus have nearly €50,000 profit, whereby the prepayment penalty would apply here, at an interest rate of 2.2% about €15,000 according to our calculations.

We live 30KM from Frankfurt and would like to have a prefabricated house built within a radius of 50km.

About us:

Net income €3,200 + 2x child benefits, my husband is the sole earner, I am still on parental leave due to our baby – no income.
Loans:
Car €470 until 05.2026
Loan 2: €123 until 11.2019
Loan 3: €103 until 09.2020

Family with 2 children (1 year and 3 years old)

Current offers we have:
Land price in Schmitten ~ €130,000
Prefabricated house from Streif Haus (turnkey except for flooring and painting work): €360,000

Possibly we would additionally have a granny flat built to rent it out and thereby reduce the loan amount, but this is only an option which would of course push the construction price upwards.
There would also be child-building subsidies twice if those still exist by then.

What do you think? What would our limit be? I have already asked for an increase at Ing-Diba, but it seems difficult, since the first loan was financed together with the Sparkasse, as over 100% was needed, they probably do not get around having to pay the prepayment penalty and deduct it from the sale profit.

Many kind regards

Hello, first of all you should contact your house bank and ask if they agree to a property transfer and up to what amount they go. Based on the income, I see a maximum of €300,000 as the amount. Anything above that is negligent.

Over €500k including NBK as a loan with €3.2k net income and €700 liabilities? No chance at the moment. When will you start working again and how much will you have together then?

I don't actually write about financing very often. But often people write here that it’s not feasible, even though it could actually work. Quite a few people in our circle of acquaintances are building at the moment, so I currently have some comparison values.

But for you, it’s really too tight. No own capital available otherwise? That would then be around 450k. Just the repayment would be about €1300 + additional costs/reserves.
In the end, we're at €1800 + €700 liabilities... leaving about €1000 remaining. I wouldn’t say it’s impossible, but one puzzle piece doesn’t fit and you’d have serious problems. I definitely wouldn’t take that risk.

Maybe buy the plot of land and start paying it off. That should be doable. When the kids are a bit older and you go back to work, then build a house.

How much income is there after the parental leave? How much longer until then?

20% of the income is already going towards loans.
Car >40T€ with that income ... whoever needs that. Sell it and get something else used for half the price, it increases the equity.

I would clean up first.
Also forget about renting out, you lack the liquidity for that.

If necessary, start to reduce certain expenses. The car costs seem very high to me. Is it such a special one?