Hello dear forum,
I have been considering building a house for a few months now, and since house construction is completely new to me, I have a few questions that you might be able to answer.
1. After some research, I am leaning towards a prefabricated house. Despite their bad reputation, these types of houses are said to perform well in terms of durability and lifespan compared to a traditional masonry house.
The downside seems to be a lower resale value due to the mentioned prejudices, is that correct?
2. I have set a maximum budget of 200,000–250,000 for the plot of land plus the house. In addition, I am planning 50,000–80,000 for interior finishing and additional costs. So the total maximum would be 330,000. Does this sound realistic to you, or would you generally advise against a prefabricated house? (If yes, why?)
3. I would like to start the construction project by the end of next year with equity of around 100,000. I would prefer to finance the rest through my main bank and set high monthly payments to get out of it as quickly as possible with minimal financial damage.
Currently, I can save about 6,000–7,000 euros per month. Should I put the entire savings amount toward the loan payments or keep the payments lower so that I can still cover them in case of emergency?
I have been considering building a house for a few months now, and since house construction is completely new to me, I have a few questions that you might be able to answer.
1. After some research, I am leaning towards a prefabricated house. Despite their bad reputation, these types of houses are said to perform well in terms of durability and lifespan compared to a traditional masonry house.
The downside seems to be a lower resale value due to the mentioned prejudices, is that correct?
2. I have set a maximum budget of 200,000–250,000 for the plot of land plus the house. In addition, I am planning 50,000–80,000 for interior finishing and additional costs. So the total maximum would be 330,000. Does this sound realistic to you, or would you generally advise against a prefabricated house? (If yes, why?)
3. I would like to start the construction project by the end of next year with equity of around 100,000. I would prefer to finance the rest through my main bank and set high monthly payments to get out of it as quickly as possible with minimal financial damage.
Currently, I can save about 6,000–7,000 euros per month. Should I put the entire savings amount toward the loan payments or keep the payments lower so that I can still cover them in case of emergency?
1. Prefabricated houses do not have a bad reputation, nor are they more durable or of higher (or lower) quality than masonry houses.
2. You can easily manage a 20 square meter (215 square feet) house with this approach – 200 square meters (2,150 square feet) is less likely.
3. You can do as you wish, I suppose – it’s unclear what kind of damage you are concerned about. If you expect that you won’t be able to maintain your income at the same level throughout the entire (limited) duration of the loan, I would advise choosing a lower monthly payment.
No offense intended… but you do sound a bit like a troll.
2. You can easily manage a 20 square meter (215 square feet) house with this approach – 200 square meters (2,150 square feet) is less likely.
3. You can do as you wish, I suppose – it’s unclear what kind of damage you are concerned about. If you expect that you won’t be able to maintain your income at the same level throughout the entire (limited) duration of the loan, I would advise choosing a lower monthly payment.
No offense intended… but you do sound a bit like a troll.
BeHaElJa schrieb:
No offense intended... but you do sound a bit like a troll.No, why??? A parallel thread has the same budget of 330,000, just with much higher demands for a double garage and other fancy extras. It seems like your situation is better off, despite having less equity 😉
@jobiho: Are you paying 20,000 or 120,000 for the plot? That basically makes a big difference!
I was worried that I might be labeled a troll 🙂
For such seemingly dumb questions, I’m happy to clarify:
I worked for 10 years as a full-time software developer for various startups and was always very satisfied with my income (and still would be today).
During that time, a side project of mine developed so well that I decided to quit my job and start my own company.
The company is working well and is currently growing in a healthy and controlled way.
I hope this helps clear up the original troll image and we can get back to the topic 🙂
@BeHaElJa:
1. From my experience, prefabricated houses face many prejudices due to their construction method and the materials used, regardless of their actual quality. As I said, I’m a complete beginner in this field and grateful for any sources!
3. The feared damage, of course, is the interest 🙂
I was hoping for some tips or tricks regarding financing with such high payments.
For such seemingly dumb questions, I’m happy to clarify:
I worked for 10 years as a full-time software developer for various startups and was always very satisfied with my income (and still would be today).
During that time, a side project of mine developed so well that I decided to quit my job and start my own company.
The company is working well and is currently growing in a healthy and controlled way.
I hope this helps clear up the original troll image and we can get back to the topic 🙂
@BeHaElJa:
1. From my experience, prefabricated houses face many prejudices due to their construction method and the materials used, regardless of their actual quality. As I said, I’m a complete beginner in this field and grateful for any sources!
3. The feared damage, of course, is the interest 🙂
I was hoping for some tips or tricks regarding financing with such high payments.
T
toxicmolotof17 Sep 2015 07:50I can of course recognize the trolling tendencies, especially since the described situation and the related problems probably affect less than 1% of the population in Germany.
But as long as the opposite is not proven, one can at least respond.
Here are some pieces of advice I would like to offer you for consideration:
1) I’m not sure if your budget will be enough. Depending on the price of the plot, there may not be much left for the house itself. And if you’re looking at rural areas, check before purchase whether the internet requirements (especially considering your professional background) can be met.
2) With a roughly €230,000 (about $250,000) loan and this range of repayment options, I would, for example, plan the loan as fully amortizing over 5 years (which corresponds to about €5,000 (around $5,400) monthly payments, plus an additional €10,000 (about $10,800) prepayment option, which could shorten the loan by around half a year.
At current interest rates, it usually doesn’t make much difference whether you fix the loan for 4, 5, or 6 years, although 6 years will naturally cost a bit more overall because the repayment is slower.
All in all, however, this is a luxury problem, and I see the real bottleneck more in the total investment amount.
And finally, the bank must consider your project realistic, especially given your self-employed status.
But as long as the opposite is not proven, one can at least respond.
Here are some pieces of advice I would like to offer you for consideration:
1) I’m not sure if your budget will be enough. Depending on the price of the plot, there may not be much left for the house itself. And if you’re looking at rural areas, check before purchase whether the internet requirements (especially considering your professional background) can be met.
2) With a roughly €230,000 (about $250,000) loan and this range of repayment options, I would, for example, plan the loan as fully amortizing over 5 years (which corresponds to about €5,000 (around $5,400) monthly payments, plus an additional €10,000 (about $10,800) prepayment option, which could shorten the loan by around half a year.
At current interest rates, it usually doesn’t make much difference whether you fix the loan for 4, 5, or 6 years, although 6 years will naturally cost a bit more overall because the repayment is slower.
All in all, however, this is a luxury problem, and I see the real bottleneck more in the total investment amount.
And finally, the bank must consider your project realistic, especially given your self-employed status.
B
Baujulchen17 Sep 2015 07:52jobiho schrieb:
At the moment, I can save about 6,000–7,000 euros each month. Should I put the entire savings amount toward the loan installments, or better keep it lower to still be able to cover the payments in case of emergency?Wow, saving 6,000–7,000€ each month—that’s something I’d like to be able to do too.
And I like to think that we’re already doing quite well ;-)
Fingers crossed that your income stays that high in the coming years and everything goes as you expect.
330,000€ is certainly not an unrealistic figure.
Of course, it depends on land prices, the size of the house you plan to build, how many people the house is for, and so on...
We are also in the decision-making process ourselves, but having gone through everything once already, we are a bit more “cautious” with the numbers :-)))