What would the financing look like?

Hello,

I am new here in the forum and have already read some posts. We are also possibly planning to build a house. I would be happy if someone here could make me a non-binding possible "sample financing" ;-)

We have a monthly net income of about 4200 EUR. So far we don’t pay rent, as we live in my parents-in-law’s house. According to my own sketch and price per cubic meter, I have come to construction costs of about 240,000 EUR including garage. Our equity is not very high and amounts to approximately 30,000 EUR. Since I am an electrician and in our company we also have sanitary and heating installation, I would contribute a lot of work myself.
The municipality subsidizes the development costs as follows:

The property is on a leasehold and you receive a loan from the municipality for the development costs. For this loan, no interest is paid during the first 15 years, only 4% repayment.

The following work I would do myself:

Electrical installation, sanitary installation, heating installation (in cooperation with the company I work for), tile work, painting, insulation work, ceilings and floors, outdoor facilities, roofing (in cooperation with a friend’s company), masonry work (in cooperation with a friend’s company), basement floor sealing, window sill installation, installation of roof sheathing, roof frame (in cooperation with a friend’s company), rainwater cistern, installation of bathroom, shower, toilet

I would be happy if there is an expert here who could make me a "sample statement" of financing.

Best regards

Matthias

Hello Matthias,

...Folgende Arbeiten würde ich in Eigenleistung machen...

Regarding financing, Marco will surely provide you with an answer ... what surprises me is the extent of the personal contribution.

You are an electrician and, in this capacity, are certainly employed in a full-time job. Have you thought about the time frame that your personal contributions will require? Many underestimate the effort and also the nerves that are lost in the process; not to mention the family stress.

Kind regards

Hello construction expert,

of course I know that this would mean there is no time for leisure during the construction period. But I am used to working after work and on weekends in addition to my job. Furthermore, I do not have to and do not want to (like many others) build a house in 6 months, I have time I do not have to move out of a rental apartment! All these tasks are not to be done at once after all, they come bit by bit. I can arrange my 6 weeks of vacation per year according to the progress of the construction. Some of my colleagues have also managed it ;-)

Best regards Matthias

Hello Matthias,

...Furthermore, I do not have to and do not want to (like many others) build a house in 6 months, I have time I don't have to move out of a rental apartment!

Very good, then good luck!

Kind regards

Hello fischaqua,

sorry for the late response. I was away for a few days.

The first thing that comes to mind is: Before any further steps are taken, the municipality as the issuer of the hereditary building rights must first declare up to which amount they approve a land registry security.

If they allow a loan up to a maximum of 70% of the total costs, you may need higher equity or possibly more personal contributions. Without this information, further planning does not make sense.

The second thing that comes to mind... Why should you as the lessee of the land take on the development costs - even in the form of a loan? Are you really willing to upgrade someone else’s property at your own expense and then lease it? By the way, I recently published an article on the topic of "Financing a Hereditary Building Right" on my BLOG. You can find it on my homepage in the "Infothek" under "Fachartikel".

And one more question for the upcoming financing calculation: How much do you estimate to save in labor costs through your own work?

Best regards

M. Thiemann

Hello fischaqua,

I cannot decide whether the funding is good for you.

Personally, I hold the following opinion: If I want to become a homeowner, I do not want to simultaneously remain a "tenant" (or leaseholder) of the land. In that case, I might as well continue renting...

Nevertheless, a hereditary building right is an affordable way to get your own house because the land purchase price does not have to be financed. But with every future new loan that involves a land charge entry in the land register, the approval of the municipality is also required. And I did not find the amount of the approval in the article!

In your situation, what bothers me additionally is that you, as the hereditary building right holder (i.e., tenant), are supposed to pay for the development of the land, which belongs to the municipality.

A very clever model – especially for the municipality, I would say.

Best regards

M. Thiemann