Owner-occupied home - Is realistic financing possible?

Hello forum community,

we are planning to build a new house. At the moment, we are in the information-gathering phase.

The following facts are available:
- Net income currently €2,000 + €184 child benefit + €570 parental allowance
- I would currently only calculate with the €2,000 here.
- After parental leave, a second child is planned. So we cannot rely on my wife's income.
- Equity: €60,000
- 2 x €50,000 home savings contracts, ready for allocation in 6 years with then approx. 30% equity

Due to the low interest rates, we are considering building now.

Expected costs:
- Single-family house prefab with cellar €220,000
- Additional construction costs: €20,000
- Garden: €10,000
- Plot: €80,000
= €330,000

Current cold rent: €470
We can currently save more than €750 per month

The plan is as follows:
Financing of €270,000 at favorable conditions, after 10 years repayment of a partial amount through the home savings contracts, in order to possibly offset interest rate increases. A bank meeting will follow in two weeks.

My questions:
- Is that realistic?
- I somehow have the feeling that despite relatively good income, it is almost impossible to manage such a new build?

Many thanks for your honest assessment!
Hecki

Hello,

Expected costs:
- Single-family prefabricated house with basement €220,000
- Additional construction costs: €20,000
- Garden: €10,000
- Plot: €80,000
= €330,000

This calculation is incorrect in that you have estimated the additional construction costs too low. It is better to calculate here with €35,000 plus a buffer in case there are increased foundation costs due to the conditions of the plot. These additional costs also do not include the costs for painting work and floor coverings, as well as driveway and terrace; so you must also have money available for these works.

I have already posted the additional costs here several times; if you do not find them via the search, you will find them at the latest on our homepage (which you find via my signature).

I somehow have the feeling that despite relatively good earnings, you can hardly manage such a new build?

That cannot be simply answered, as every construction project and thus every financing is different. In addition to a bank discussion, also have a conversation with an independent financing broker; the latter has no problem incorporating KfW funds into the financing and thus working for the customer and not the bank management ;)

Best regards

For a construction project according to your requirements (deckt sich ziemlich mit unseren Plänen) you need €1300 per month. That includes interest, repayment, and additional house-related costs (1% repayment). But you should aim for a higher repayment rate than this. That means your wife will eventually have to earn a good income to finance the house within an acceptable timeframe. If your wife wants to work again with 2 children, the daycare will probably consume the additional earnings, since if I calculated correctly your wife's salary before maternity leave was just under €900 net.

There are quite a few things missing from your cost breakdown. Additional building costs can be significantly higher, and I also consider €220,000 for a house with a basement to be tight. But ultimately, it does not depend on the house, but on the plot. If everything really fits, it can work out. But that means no new kitchen, no special wishes, no paved driveway, and no garage...

We are building 150 sqm without a basement on a €100,000 plot and will pay almost €400,000. There are some extras included, but it doesn't go under €350-360.

I somehow have the feeling that despite relatively good earnings, you can hardly manage such a new building?

Good is relative. I know, often you can’t change much yourself, but 2000€ with 2 children is really not that generous, especially for building a house.

I would definitely, as the construction expert says, also inquire with an independent financer. From our experience, I can tell you that this is the best way. You can recognize a good (and I also think reputable) one by the fact that he

1. does not get a cent from you for his services
2. cannot give you numbers on the day of the first meeting
3. goes through all the costs with you again.

Whether the costs are appropriate or not, I think he will be able to assess (if he operates regionally and has a lot of experience with builders). For example, for us, all the incidental costs are much cheaper. We would never come anywhere near 35K. But this is purely due to the region. Our financer told us that directly as well. In other regions of Germany, I think the 35K will indeed be necessary.

Hello everyone,
thank you very much for the numerous responses!
We will make an appointment with an independent service provider and see what they have to say.

Our advantage is that we are by no means in a hurry. We could also wait a few more years and keep saving. However, every month that I pay rent hurts me. I could also put the money directly into my own house.

Best regards,
Hecki