Presentation of a construction financing variant

Have you planned a buffer? Something unforeseen always happens during the construction phase.

We haven’t planned one because we want to proceed with the calculated costs and our architect doesn’t consider the current plan entirely unrealistic. If it ends up a bit more expensive, at least we have enough money behind us so that it won’t ruin us. However, it would still be annoying.

- For loan 1 and 4, I notice the short fixed interest period. For 4 also combined with a low repayment rate. Do you have an offer for 1 with at least a 15-year term?

For loan 4, there is only the "take it or leave it" variant; with that interest rate, it is very hard to say "NO". Therefore, without any special repayment, it will last forever. But who knows what will happen in 20 years. Nobody can plan that.

- Is family planning completed or are more children planned? How certain is this current decision?

The decision is basically made, we’re just going through the "did we forget something" phase. Whether we want a second child will be decided once everything has worked out. So clearly after the house construction. ;-)

- At 10 months, the costs for the child are still manageable; it will be more expensive later (also consider this in terms of salary development). And in 3 years, when the house installment increases, a) the childcare allowance will end and b) kindergarten fees usually come into play. Can she then return to work? What will the income side look like then?

Whether she goes back to work depends on whether there is another child. If she does want to go back, then it only goes one way: it will look better. ;-)

- You currently pay around 850 euros for how big an apartment? A house has higher additional costs than an apartment. From year 3 onwards, you’d have a difference of 70 euros/month. That seems very little to me. => Could be tight! Normally, people calculate roughly €2.50 additional costs per sqm.

We currently pay 295 euros cold rent for 70 sqm in a 1960s old building attic apartment. Additionally, there are 180 euros additional costs, 80 euros electricity and 80 euros heating costs. So it’s 635 euros warm rent and we save about 550 euros on top. That makes a total of 1185 euros. Our loan repayments will be 782 euros in 3 years, plus 325 euros additional costs (130*2.5), so that would be 1107 euros. Admittedly, then we won’t save 550 euros per month anymore, but we will eventually have a house.

- What about building up further reserves? Repairs, car, washing machine, etc.?

They are not included in the 550 euros savings and will be set aside monthly in addition. And for bigger purchases, there are always 2 additional salaries.

- What does your personal household budget look like? Have you honestly reviewed your current expenses? Consider how they will develop with the house? (Increasing travel costs, for example, or similar).

Travel costs will actually decrease significantly. As for other income/expenses, they are already (analytically ;-D) matching, otherwise it wouldn’t work now anyway. The only thing we can’t realistically estimate are the "follow-up costs for the child," but there is always a certain life risk. Hopefully, salary increases will balance that out.

I have you in mind from other posts as a rather analytical and logical type. Don’t let yourself be guided by emotions at this point here.

I’m trying, but—and that’s what the forum is for after all—it’s not always that simple. All the more I try to get one or another suggestion from time to time.

Are there already offers for the 10 largest positions of the construction costs (based on plans and tenders for exactly your construction project)? I ask from my own negative experience with cost estimates....

Not complete yet. But I expect it soon.

Phew. As I see it, you are already quite far along in your planning and basically ready to start. So I don’t quite understand the point of this thread. But alright. My honest opinion: The whole thing is super risky and in my opinion also dangerous. You have very short fixed interest periods on your loans, employer loans among them, and then repayment rates where you already know that in the best case there will still be a remaining debt of about 50,000 EUR (!!) at the start of retirement. And then your income is also very low. And there is no buffer during the construction phase (or only a very small one). My advice: If you want to start at all, definitely wait with signing until you are 99% sure that all estimates from your architect are correct. That means until you have bids for ALL trades.

I assume that the woman will soon go part-time and contribute to the income? Then it would ease the situation.

Good evening,

first of all, thank you for the clarification.

The costs were determined by my architect, for the smaller items partly based on his own experience and volume/unit determination, for the large items already on the basis of requests for quotations from companies, especially roofing and heating.

The following prices are always net prices!

217 TEUR construction costs gross (182 TEUR net)

My partner has a comparable object in his records; regardless of the fact that the dimensions are probably hardly correct. The costs amount to TEUR 207 as a KFW 70 efficiency house; turnkey (without painting and floor coverings), including all engineering and planning services. A photovoltaic system including storage would be TEUR 15, a geothermal heat pump TEUR 12 with 2 drillings, a stainless steel chimney TEUR 3.5, a prefabricated garage 3 x 9 TEUR 11; all subject to additional costs. Therefore, I can hardly imagine that your architect can award the trades as you have calculated above. However, I keep my fingers crossed for you.

27 TEUR various incidental costs gross (23 TEUR net)

You know my list, so I will save you any further remarks. However, one thing is definitely missing from your enumeration, and that is a buffer for the unexpected; both regarding the property situation and in terms of awarding contracts. You should by no means lose sight of that.

Rhenish regards