Were you overly cautious or did you even have to provide additional funding?

Hi,

the question is already in the subject

We think we are quite overly critical with our finances and the monthly burden concerning credit, etc. I often hear from friends and acquaintances that this relaxed after building, and many say that if they had known beforehand that it would go so (well), they would have added this or that extra during the construction phase. The almost unanimous consensus is: after the build, life was financially more relaxed than expected before the build.

What is your experience with this?

Hello,

we also took a rather conservative approach. A refinancing would have been, for me as a banker, the absolute worst-case scenario.

Therefore, in our main loan, we left the option open not to draw up to a maximum of 10% of the loan amount, thus creating an additional buffer for ourselves.

Since, as probably in most cases, there were unplanned additional costs for us as well as the occasional "upgrade," we fully drew down the loan despite the buffer.

Nevertheless, the monthly burden is still quite manageable – that’s how we planned it from the beginning.

Regards,

Dirk

if they had known beforehand that it would go so (well), they would have added this or that extra during the construction phase. The almost unanimous consensus is: after the construction, people had a more relaxed financial life than they had thought before the construction.

I think it really depends on how you tick and calculate.
I also know people who had to refinance because a) they hadn’t properly calculated beforehand and b) they couldn’t hold themselves together during the construction phase (Now that we’re on the subject…)
Those two traits usually go hand in hand and lead to a not entirely carefree life after the construction because the repayment plan, without refinancing, didn’t leave much room for maneuver.
Others calculate with a safety buffer, can pull themselves together sometimes, and then possibly have money left over that wasn’t actually needed to invest early in projects planned for later or whatever. Then the repayment plan fits well into life.

No refinancing was possible for us - this was explicitly communicated to us.

Ultimately a fine thing, because that way you are (mostly) in control. We planned generously beforehand, i.e. wanted a certain luxury, so there was hardly anything added during the construction phase that made things more expensive.

What was problematic (as so often): the architect's estimates were partly good, partly rubbish - ultimately we would have had a real problem without own contributions & some good friends.

Hello,
it probably also depends on how you build. With individual contracting via an architect, you can probably save something, but you can also easily lose a few euros more. With the large general contractor and pre-sampling, the budget should actually fit.

We calculated a buffer that sometimes shrank and sometimes grew again in between. In the end, we still had our buffer and a bit more left after completing the construction. The money will now be invested in the outdoor facilities in spring.

You shouldn't plan too much buffer either (=> loan-to-value ratio), but it definitely shouldn't be too little.
If there is anything left over, you can usually make special repayments of 5% annually.

Thank you for your experience. Interesting. Yes, for us it is basically that we now apparently have planned more buffer than we (at least as of today) will need. For example, ring beams are omitted, the notary and land registry costs were lower, and the building application costs will also be cheaper. That quickly adds up to a few thousand euros. You think: man, why not make the house 50cm bigger when you now have concerns that some rooms (bedrooms) are, for example, actually too small. And surprisingly, 50cm makes quite a difference there, but also in the calculation. The general contractor wants 16,000€ for that after the first estimate, +/- 10% for 50cm more in the upper floor, ground floor, and basement. I wonder if you really notice that. I mean, 50cm more in the house. On the other hand, that immediately comes to 13m² - 14m² more.

Because one phrase we always hear: if I had known that before, I would have done it right away...