Hi,
We built three years ago and were faced with the same question as you right at the beginning... Maybe our approach can help you as a small decision aid: In 2011 we decided to build and the first step was – with zero equity – to set up a standing order that from now on transferred a fictitious installment to our savings account every month. Every first of the month. Do the same today and from now on every month – put away 1300 euros. It’s a good exercise for later when you’ll have to pay it anyway...
This puts you in a super "cool" position with every seller: because with each month the budget – and thus the house you can afford – grows by at least 1300 euros bigger, nicer, more luxurious... A great feeling – and due to the steadily improving equity/loan ratio ==> lower interest rates – and salary increases the budget grows even more significantly. Time is on your side!
Then you look around and inform yourself – and every, really every 95% offer you reject with a smile. Just like every offer where the seller pressures you... If he says: "But you have to sign today, otherwise...", you respond smiling "...OK, then the next one will get it! We have time, next month we can afford a better house :-P"... It’s fun – especially because of the seller’s facial expression! And if the 100% – made just for you – house comes along, strike, because purely financially, something is surely possible even in your current situation.
Another – very pragmatic reason – to wait some more – at least when building new or buying with a major renovation project: You haven’t built yet and therefore can’t know or plan all the costs that will come your way. But you need that to calculate the loan amount correctly. If that’s not right from the start, you have to go back to the bank for every little extra... And that happens fast...
Building description not read correctly and turned a 2 square meter tile backsplash on the wall into a half-high tiled bathroom all around: 3000 euros;
Forgot the bill from the land registry office... uh district court.. 800 euros;
Central ventilation system: hard to retrofit... hmm, then just make it part of it: 10000 euros...
Every trade knows perfectly well how to squeeze extra money out of you with the words "you only build once."
If you don’t have that as equity, you run to the bank or give up; the first is unpleasant, the second makes you unhappy… Because then you know what your house could have had, if you had just had some hidden equity...
If you have 20000 euros equity left (only one year of saving), you can also say with a smile: "What’s money? Of course, we’ll do that." And if you don’t spend the money otherwise, buy great furniture with it...
So in summary: maybe you really get the money now and can get started, but it’s better and more fun to take your time... And who knows where the path will lead in the end... We ended up building with the construction company we contacted very first on the very first evening via mail.... After one and a half years without an answer to our mail and talks, reservations, and completed contracts with 5 other companies on at least 10 plots... And we never regretted it... So take your time, go easy, and let the money work for you... Good opportunities always come around... today, tomorrow, in 2 years...
Best regards