What loan amount is realistic for our construction project?

Hello everyone,

my first post here unfortunately only contains questions, sorry for that.

My wife and I are planning to build a house.
We are currently particularly concerned about the loan part.
I (still!) have too little knowledge to calculate myself whether the bank advisors will give me realistic amounts.
So that I can realistically assess my situation, I would like to know what is possible given my financial situation.

At the moment, our situation looks as follows:

Age: 27 & 23
Job: both permanent positions (stable for the long term!)
Salary - net (tax classes IV/IV): 3200€
Equity: 60000€ and 2 adjacent building plots (NRW)
No loans, payment obligations, etc.

Current rent for the apartment is 1000€ including additional costs.

We would like to repay a loan in the range of 1000€/month, but do not know what loan amount is affordable for us.
Of the 60k€ equity, I would like to "use" only 30k€ and use the other half for interior furnishings.

Could you kindly indicate to me what total loan amount is more likely to be realistic so that we do not break our necks on it?
Before visiting the bank, I would at least like to have a rough direction...

Thank you very much
and best regards,
Niko

Hello,

I have to seriously doubt the term "bank advisor" based on my experiences over the past few weeks.

We have a similar income of about 3200.00. It consists of net 2500.00, 184.00 child benefit, and a split parental allowance over 24 months of 575.00. If my wife goes back to working part-time, she would probably earn around 900 EUR.

Our construction costs 220,000.00 with 50,000.00 equity. Although we are not holding back that much equity for the interior furnishings. We like the things we have and with a low rate you have more room for new purchases anyway.

My financing: 50,000 KFW153 3.6% with 1.91 repayment, 70,000 KFW 124(35 years) at 3.8 with 1.4? repayment, and 50,000 at 4.25 + 1% repayment.

The rate is 761,?? Eur, although we might not even draw on some of the 4.25% loan. We have calculated generously for now. Even my wife as a kindergarten teacher can cover this rate + the house ancillary costs in full-time. That is quite important, to have a Plan B in your pocket.

Regards Ille1975

Hello everyone,

my first post here unfortunately only contains questions, sorry for that.

My wife and I are planning to build a house.
Right now, we are especially concerned with the loan part.
I (still!) don’t know enough to calculate myself whether the bank advisors will give me realistic amounts.
So that I can realistically assess my situation, I would like to know what is possible given my financial situation.

Currently, our situation looks as follows:

Age: 27 & 23
Job: both permanent full-time positions (both stable in the long term!)
Salary - net (tax class IV/IV): €3200
Equity: €60,000 and 2 adjacent building plots (NRW)
No loans, payment obligations, etc.

Currently paying rent of €1000 including utilities.

We would like to repay a loan in the range of €1000/month, but don't know which loan amount is affordable for us.
Of the €60k equity, I would like to "use" only €30k and use the other half for interior furnishing.

Could you kindly show me what total loan amount is tendentially more realistic so that we don’t break our necks on it?
I want to have at least a rough idea before visiting the bank...

Thank you very much
and best regards,
Niko

Hello,

well, I can only give you one piece of advice and that’s how we did it ourselves, we used some loan calculators on the internet. First of all, you need to have a rough idea of how big your house should be and what you generally want to spend.

Then you roughly have the amount you have to spend. You enter this into a building loan calculator and voilà you have the monthly installment amount at hand.

It’s best if you then also calculate your monthly expenses and financial obligations so you can estimate whether you can afford it or not.

Actually, it’s quite simple.

[...] First, you roughly need to know how big your house should be and what you generally want to spend.

Then you roughly have the amount you need to invest. You then enter this into a mortgage calculator and evola you have the monthly installment amount available.
[...]

I think I have a different (possibly wrong!) approach:
First, I consider how much loan we can easily afford and only then do I look at what is possible with this total amount

Depending on how long you want to secure the interest rate, you can roughly, but really only very roughly, expect the following interest rates.

4.0% for 10 years, 4.5% for 15 years. This can still vary depending on whether [KFW funding] is taken up or not, negotiation skills, etc. But as a rough guideline, I think these interest rates are useful. Everyone requires at least 1% repayment.

200,000.00 EUR - 4% + 1% repayment 833.34 payment/month (10 years)

200,000.00 EUR - 4.5% + 1% repayment 916.67 payment/month (15 years)

With only 1% repayment plus saved interest, the whole thing lasts over 30 years. If you want to pay off 1000.00, set up a construction account and deposit 1000.00 per month. Let the bank debit it, save the surpluses, and make a special repayment once a year.

....before YOU even enter a bank, read up on your own in forums, google about construction financing, etc. The best is an acquaintance/friend at a bank whom you trust and who doesn’t want to sell you anything. Based on all your data, I think you can finance 200,000.00. If I simply divide your income by two, each of you can also individually, though just barely, cover the interest and repayment payments.