What is possible? :) (another one)

Hello,

backbone23:
May I ask what you need 300 sqm of living space for?
And the large plot... slowly I'm starting to believe that 670k € might not be enough.
Be careful! The 300 m² living space is from Shism. I once posted the budget.
I am not building a house with 300 m² living space and Shism has a different budget than 670k €. :)

Der Da:
An architect cannot charge free prices. They calculate according to a fee schedule, which is based on the total costs of the construction project. It also depends on what you let the architect do. Perhaps someone else is responsible for building supervision, etc....
Thanks. That matches my research.

Der Da:
You don't know what Otto.Motor has planned. I have an aunt who had her first child at 33 and now has 7 of them.
We don't even have one child yet. I am not even thinking about a second one — let alone six! :D

HilfeHilfe:
Hello Otto.Motor (by the way, original name) ;)
What are you going to do with the condominium afterwards? Sell, rent? Or is it debt-free?
I could smile about your name too.
The condo is debt-free and is not included in the equity.
But there was also the consideration to buy a condo (150k €) and rent it out.
I have to see what the bank and the tax advisor say.
But I would prefer to invest the entire equity (without reserves) into the house construction to become debt-free faster.

Shism:
I guess he already counted it in the 300k equity... or?
Already answered. :)

Shism:
With the full package starting from planning, through tendering, construction management/supervision etc approx. 10% of the construction costs..
Great, thanks.

Regards
Otto.Motor

Hello,

from a purely financial perspective, I have to counteract here. What kind of panic is being spread here. What if YOU were not financed then?? The banks go up to 100, sometimes 105 or even 110% of the lending value. We have a 50% loan-to-value ratio here, 300k equity ...

This is not panic, but pure realism.

And: equity does not equal loan amount!

Be careful with the salary as well. Especially in large companies, changes can take a long time and in the worst case, things may not develop as desired. I have a 34-hour week and once discussed going up to 38 hours for a year in the corporation, in the end, I gave up (I’m not going to argue about sitting longer in the office :)) This does not mean for a long time that it’s like this everywhere, but as long as nothing is on paper, it’s worthless.

Our income is not that high. Equity is €210,000, yet one should not be dazzled by such numbers.
I don’t want to say more with that.

Our first house building ideas are already over 4 years old. Accordingly, the phase of euphoria has long passed and realism has set in, and I can only say that it was/is a good thing.

And: Equity does not equal lending amount!

Oops, that's not wrong, but it shouldn't be stated like that.

What I mean is:

Total costs - equity = lending amount
But lending amount does not equal lending value.

Total costs - costs not recognized by the bank (usually all incidental costs) = lending value

In other words: The amount the bank assumes it can obtain from the sale of the house if the debtor stops paying = 100% lending value.

Example:

- value set by the bank 100,000, incidental purchase costs 10,000

1. €10,000 equity = 100% financing (100,000€ lending amount)
2. €20,000 equity = 90% financing (90,000€ lending amount)
3. €0 equity = 110% financing (110,000€ lending amount)

Now it should be clear. :)

I watch this discussion with interest!
The core message here should be: one should not be blinded by the existing equity and think that with a lot of equity one can also build twice as large (land included).
In the case of the OP, however, it appears differently.
While other builders want to finance a property with 70,000 - 100,000 equity, 250,000 - 300,000 have to be borrowed.
Here there is 300,000 equity and the property is accordingly planned to be almost twice as expensive as with others.
Unfortunately, the salary does not reflect the proportionality to repay such costs.
The salary (sole earner, wife brings additional income) is not bad, just not good enough to repay quickly and significantly (commuting costs in the countryside must also be considered).

Maybe one should think in moderation and lower their expectations? I know it's hard with such security, but the OP’s intention is still to repay quickly alone... but with increased demands and the credit framework, it looks like a normally slow financing.

What is the bank’s stance on a 50% financing? I've heard that banks don’t like to finance such things because of the low mortgage amount?

Hello,

I no longer want to continue the salary discussion. I think a "stranger" cannot assess that. For that, I would need to provide more details, but that was not the question.

The 620,000 to 670,000 € were estimated by me. The budget does not have to be fully utilized.

ypg:
What is the bank's stance on 50% financing? I have heard that banks do not like to finance such things because of the low mortgage?
We have a very close and good relationship with our bank. Our scoring with the bank is very good, so we get corresponding conditions. In the discussions, the equity was always viewed positively. I think a good bank should also evaluate it that way. Anything else would seem very, very unprofessional to me.

Thanks for all the contributions. If we know more about the architecture, I will certainly get back in touch.

Best regards,
Otto.Motor

What is the bank's stance on a 50% financing? I've heard that banks don't like to finance such things because of the low land charge?

With this question, I was actually addressing the bankers who are active here. But if you have already figured this out, great :)