ᐅ Homebuilding Forum – Would You Choose to Buy or Build a House Again?
Created on: 11 Dec 2015 11:09
X
xycrazy
Hello,
we are about to sign the contract with the developer but have started seriously reconsidering whether we should go through with it.
We negotiated for 8 months and were quite sure about it. However, towards the end, some issues arose regarding the contract and other matters, which we managed to resolve.
It now looks like we would be paying a third of our net income to the bank for 22 years. I think we can afford it. But when you are used to paying monthly rent of about €800-900 (divided by 2), this is quite a different level.
With a house, it’s not just the loan payments; there are ongoing maintenance costs as well. From what we’ve read, this is roughly €2-3 per m² (about 0.2-0.3 per sq ft) per month. So that’s another €400-500 per month. And, of course, there is much more work involved too.
Admittedly, this is stressing us out quite a bit, especially my partner. She is worried about the heavy financial burden each month. Is that justified?
We don’t want to live just for the house; we want to go on vacations, avoid problems with children, and so on. As I said, the current situation is manageable, but we wonder if we might be underestimating the costs.
So here’s my question to the community: looking back at everything you know now about loans, maintenance costs, upkeep, and so forth, would you buy or build a house again?
If yes, why? If not, why not? I’m really interested to hear your thoughts! And were there any surprises—positive or negative—that you didn’t expect?
Regards
we are about to sign the contract with the developer but have started seriously reconsidering whether we should go through with it.
We negotiated for 8 months and were quite sure about it. However, towards the end, some issues arose regarding the contract and other matters, which we managed to resolve.
It now looks like we would be paying a third of our net income to the bank for 22 years. I think we can afford it. But when you are used to paying monthly rent of about €800-900 (divided by 2), this is quite a different level.
With a house, it’s not just the loan payments; there are ongoing maintenance costs as well. From what we’ve read, this is roughly €2-3 per m² (about 0.2-0.3 per sq ft) per month. So that’s another €400-500 per month. And, of course, there is much more work involved too.
Admittedly, this is stressing us out quite a bit, especially my partner. She is worried about the heavy financial burden each month. Is that justified?
We don’t want to live just for the house; we want to go on vacations, avoid problems with children, and so on. As I said, the current situation is manageable, but we wonder if we might be underestimating the costs.
So here’s my question to the community: looking back at everything you know now about loans, maintenance costs, upkeep, and so forth, would you buy or build a house again?
If yes, why? If not, why not? I’m really interested to hear your thoughts! And were there any surprises—positive or negative—that you didn’t expect?
Regards
B
Bauexperte11 Dec 2015 13:41xycrazy schrieb:
Hello,
we are about to sign with the developer and are now really wondering whether we should go through with it at all. This feeling is—up to a certain point—“normal;” you are experiencing “signature anxiety.” As my predecessors have rightly pointed out, you now need to remind yourselves why you decided to build your own home in the first place. If those original reasons still apply, the investment and your income are aligned, and you can handle occasional tough days where everything seems to break down, then you should see the project through to completion.
For added confidence, consider consulting an independent expert based on a two-person principle, and I wish you the best of luck!
Regards, Bauexperte
N
nordanney11 Dec 2015 14:51xycrazy schrieb:
Thank you very much for the numerous responses. What I would like to know now is your calculation.
So, what percentage of your income went towards the loan repayment? I’m really interested in the income-to-loan ratio. For us, it’s 30% of the income with an equity contribution of 50-60% (especially the garden costs tens of thousands of euros, which will be invested gradually over time…).
Masipulami11 Dec 2015 15:39xycrazy schrieb:
Thank you all for the many answers. What I’m still interested in is your calculations.
So, what percentage of your income went towards the loan repayment? The income-to-loan ratio really interests me. For us, with a net income of about 5,300 € (approximately $5,700) and a monthly payment of 1,200 € (about $1,300), it’s just under 23%.
So far, we have invested nearly 510,000 € (land, house, landscaping, additional construction costs, upgraded specifications, kitchen, furniture, etc.). Of that, 260,000 € (roughly $280,000) was already paid from equity, and the rest is financed through a loan.
We plan to make around 5,000 € (about $5,400) in extra repayments per year, so we should be debt-free in about 15 years.
It was important to us to avoid having to restrict ourselves too much despite the loan.
Have we ever regretted building the house? In short: No, not for a single minute!
PS: We only had 20% equity because originally I never planned to build and spent everything... (which I don’t regret, it was a good life: cheers, hobbies, and endless vacations).
Otherwise, our income is roughly the same as Masipulami’s. Our house, however, was somewhat cheaper at 370,000 (370T).... resulting in 29% instead of 23%. However, we have 100% fixed interest until the loan is fully paid off (makes it more expensive, but it’s worth it for my peace of mind). Prepayments of 10% per year are possible.
Previously, with the (I’ll say it frankly: dumb) rental place, the ratio was 22%. The trend was an increase of 3% per year. So it’s bearable... Freedom can be bought. Just need to cut back a bit on hobbies. One less vacation... or a shorter one.
Otherwise, our income is roughly the same as Masipulami’s. Our house, however, was somewhat cheaper at 370,000 (370T).... resulting in 29% instead of 23%. However, we have 100% fixed interest until the loan is fully paid off (makes it more expensive, but it’s worth it for my peace of mind). Prepayments of 10% per year are possible.
Previously, with the (I’ll say it frankly: dumb) rental place, the ratio was 22%. The trend was an increase of 3% per year. So it’s bearable... Freedom can be bought. Just need to cut back a bit on hobbies. One less vacation... or a shorter one.