ᐅ We are planning to build in 2022; the planning phase is beginning.
Created on: 6 Jun 2020 09:33
Y
Ybias78
Before I share the completed data, here are some details about our building project. We are still quite early in the process. About 2.5 years ago, we purchased a plot of land that we are currently paying off. The plot is located within the developed area of Fichtenwalde (about 50km (31 miles) south of Berlin) and is currently classified as forest. There are about 80 trees on the land. Converting it into a building plot is not a problem. However, there is a tree protection regulation, which means all trees must be replaced. The cost of felling the trees, including replanting and a financial deposit (in case the replacement trees do not survive), is around €20,000 (based on feedback from our neighbors who built last year).
We plan to start building the house at the beginning of 2022 and want to consult an architect by August 2020 to design the house and submit the building permit / planning permission application. While the building application is being processed, the land can then be converted, including tree removal. This will be paid for with the money we save from now until the new build. We don’t have any other equity. We moved in together around 10 years ago, during which time we had to pay off my student loans, buy two cars, etc. Our income has also increased over time.
We now need some help with the overall planning. As mentioned, our current plan is:
Here is the plot:
Information about us:
General information about you:
Expenses already included elsewhere can be omitted. This list is not exhaustive and can be extended or summarized. Please specify all costs monthly, even if they only occur annually!
Housing costs:
Other expenses:
General information about the property:
We plan to start building the house at the beginning of 2022 and want to consult an architect by August 2020 to design the house and submit the building permit / planning permission application. While the building application is being processed, the land can then be converted, including tree removal. This will be paid for with the money we save from now until the new build. We don’t have any other equity. We moved in together around 10 years ago, during which time we had to pay off my student loans, buy two cars, etc. Our income has also increased over time.
We now need some help with the overall planning. As mentioned, our current plan is:
- Consult an architect and plan the house by August.
- Submit the building permit / planning permission application in October.
- Tree felling can take place by the end of February.
- In 2021, we will look for a (most likely) regional company to build the house (recommendations welcome).
- From June 2020 to December 2021, the saved money will be spent on:
- Architect fees, tree removal, paying off the land including a €2,750 special repayment. A new car for my wife (approx. €10,000) will also be purchased.
- Cheaper items should also be covered, such as surveying, soil report, etc.
Here is the plot:
Information about us:
General information about you:
- Who are you?
- A family of three.
- How old are you?
- She is 38, he is 41, daughter: 8.
- Do you have children?
- Yes, a girl.
- Are more children planned?
- No others planned.
- What do you do professionally?
- She is a full-time teacher. He is a controlling manager for several hospitals (full-time).
- Are you employed, self-employed, retired, homemaker, etc.?
- Both employed.
- How many hours do you work?
- She works full-time with 27 teaching hours plus preparation and follow-up time. He works 40 hours.
- What are your gross/net incomes?
- She: €2,820. He: €3,000 (tax class IV/IV). This includes about €400 in company pension contributions. Additionally, there are annual bonuses of about €3,000 (not included in net income).
- How much child benefit do you receive?
- €204.
- Other transfer payments like parental allowance, sick pay, etc.?
- None.
- How much equity do you have?
- Currently negligible (under €10,000).
- How much of that equity do you want to invest in the house project?
- All of it.
Expenses already included elsewhere can be omitted. This list is not exhaustive and can be extended or summarized. Please specify all costs monthly, even if they only occur annually!
Housing costs:
- Current basic rent (cold rent)
- €390
- Current total rent (warm rent)
- €567
- Electricity
- €72
- Gas
- None.
- Water, sewage, waste disposal, street cleaning
- Included in additional costs.
- Telephone, internet, mobile phone
- €85 (including Amazon Prime and Netflix)
- Public transport monthly pass (also for children)
- None.
- Car loan (or savings rate for a new car)
- Currently none.
- Insurance
- €100 per month (one fully comprehensive, one partially comprehensive).
- Taxes
- €34
- Fuel
- €200
- Repairs
- €140
- Other
- Is there a second car, motorcycle, scooter? Please specify all costs again!
- Private health insurance (also supplementary health insurance, daily sickness allowance, etc.)
- Dental supplementary insurance: €37
- Liability insurance (including pets)
- €7
- Capital or term life insurance
- None
- Pension insurance (including company pension plans)
- Company pension contributions (already included in net income).
- Disability insurance
- None
- Accident insurance
- None
- Household contents insurance
- €7
- Legal expenses insurance
- €20
- Other insurance (e.g., travel insurance, funeral insurance)
- Groceries
- Difficult to plan.
- Dining out
- Personal care/drugstore
- Pets (food, vet, medication, housing)
- Medication
- Clothing
- Furniture
- Childcare/school fees (including meals)
- After-school care €190 including meals
- Tutoring
- School supplies and books
- Club fees/gym
- Student association: €20
- Gym: €25
- Daughter’s music school: €66
- Babysitter
- Toys
- Cleaning
- TV/video/audio/CDs/DVDs
- Tickets (sports, cinema, concerts, etc.)
- Donations
- Student association: €15
- Other
- Vacation
- House
- Retirement
- Hobbies/gifts
- Other
- Total: €2,250
Other expenses:
- Alimony?
- Loans?
- €250 for the land.
- Other?
- Anything forgotten? Please add here!
- Total income: €6,024
- Total expenses: €3,769
- Balance: €2,255 (saved).
- Including cold rent and optional savings (e.g., savings rate for the house).
General information about the property:
- How large is the plot?
- 1,447 sqm (15,575 sq ft)
- What are its dimensions?
- 20 m (66 ft) road frontage x 72 m (236 ft)
- What is the land value?
- €120 per sqm
- New build, renovation / year built, house type?
- New build – L-shaped bungalow (we are still very early in planning)
- Garages?
- Depends on the budget.
- How big should the house be? (living area / usable area)
- About 140 sqm (1,507 sq ft)
- What is the market value of the land and house after completion?
- Land approx. €200,000 + house €350,000 = €550,000
- Land cost:
- Current outstanding debt €42,000
- Development costs
- Plot is fully developed.
- Acquisition incidental costs (notary, court, property transfer tax, realtor)
- Building or purchase costs (including architect, structural engineer):
- €300,000 budgeted.
- Renovation or restoration costs
- Additional building costs (e.g., utility connections, soil expert, construction electricity, etc.)
- Planned: €50,000
- Outdoor facilities/terrace, paths, landscaping, fences, etc.
- Depends on the total costs.
- Financing costs (fees or commitment interest)
- Total costs
- Remaining debt on the land + new build: Planned financing amount: €400,000
- Kitchen costs
- €10,000
- Furniture, lamps, decoration
- Mostly furniture will be kept and replaced gradually.
- Other "non-acquisition, incidental acquisition, construction, or additional building costs"
- Total costs:
- €400,000
- Deductible equity
- €0 (will be used for clearing the plot; €25,000).
- Financing amount
- €400,000
Of course, you will need to submit estimated values.
I made a list:
General contractor offer
10,000 for surveying
50,000 for additional construction costs
100,000 for outdoor facilities
20,000 for kitchen and furniture
= Total costs
Except for the general contractor offer, all of these were rough estimates based on research.
I made a list:
General contractor offer
10,000 for surveying
50,000 for additional construction costs
100,000 for outdoor facilities
20,000 for kitchen and furniture
= Total costs
Except for the general contractor offer, all of these were rough estimates based on research.
As mentioned several times, each bank handles this differently. If it’s just about a bank offer, your estimated values are sufficient. However, if it involves a binding signature, you need a bit more detail. For an architect, the cost estimate is just that; for a general contractor, it is an offer. It’s perfectly reasonable to include additional estimates for things like options upgrades, incidental construction costs, landscaping, and so on. Of course, these estimates should also be realistic. The bank will likely scrutinize them further if necessary.
SteLa33 schrieb:
Of course, you will need to submit estimates.
I made a list:
General contractor offer
10k for surveying
50k for additional construction costs
100k for landscaping
20k for kitchen and furniture
= Total costs
Except for the general contractor offer, all were rough estimates based on research Only 10k for surveying? I’m rather expecting 30-35k. The kitchen will be paid from equity.
Thanks for the feedback.
R
RotorMotor20 Aug 2020 11:57Ybias78 schrieb:
10k just for the upgrade? I’m expecting more like 30-35k.It really depends on what is included in the fixed price offer!
What you include for contingency really depends on your preferences and your quote.
We had everything we knew beforehand included in the quote.
Since that was most of it, we stayed well under 10,000 euros.
Then there were mainly small things like a downpipe outlet in the gutter or a recess in the drywall for the shower. Also some plumbing, tiles, electrical work, doors, but we didn’t have any major surprises there.
We looked at the standard specifications from both potential builders beforehand and carefully considered what extras we wanted.
I found the landscaping and additional costs much harder to plan.
Fortunately, we included a 25,000-euro (about 27,500-dollar) buffer on top just in case...
Regarding the kitchen, it doesn’t really matter whether you pay from your equity or from the bank.
We just added up the total costs, subtracted the equity, and the rest was the loan amount.
In the end, for example, we had the bank pay the kitchen invoice to avoid commitment interest charges.
Instead, we are paying for the landscaping with equity and so avoid those commitment interest charges.
We had everything we knew beforehand included in the quote.
Since that was most of it, we stayed well under 10,000 euros.
Then there were mainly small things like a downpipe outlet in the gutter or a recess in the drywall for the shower. Also some plumbing, tiles, electrical work, doors, but we didn’t have any major surprises there.
We looked at the standard specifications from both potential builders beforehand and carefully considered what extras we wanted.
I found the landscaping and additional costs much harder to plan.
Fortunately, we included a 25,000-euro (about 27,500-dollar) buffer on top just in case...
Regarding the kitchen, it doesn’t really matter whether you pay from your equity or from the bank.
We just added up the total costs, subtracted the equity, and the rest was the loan amount.
In the end, for example, we had the bank pay the kitchen invoice to avoid commitment interest charges.
Instead, we are paying for the landscaping with equity and so avoid those commitment interest charges.
Ybias78 schrieb:
However, I need to know how much money I require. The main point of the question was whether banks accept estimates since the selection of materials has not yet taken place and I can only roughly estimate the costs. Are you hard of hearing today? – The total amount will inevitably include estimated items, which is nothing new for the loan approver. You can, of course, reverse the order of selection and budgeting – but then, naturally, the loan amount will partly depend on the size of the tiles.
Ybias78 schrieb:
The kitchen will be paid from equity. Keep dreaming. The kitchen must be included in the financing: you need your equity as a “buffer without trouble,” and the kitchen is not available in that sense since it will only get more expensive if you can’t install the final kitchen when you move in. A temporary solution means double installation, and the alternative of “construction site doors” on kitchen cabinets is something you really don’t want. Since you can only spend your equity once – so not simultaneously for the kitchen and the buffer – I recommend including the kitchen in the calculation (in fact, all items whose costs are known should be included). If you happen to have unused budget left at moving in (rare for first-time builders!), then make a special loan repayment with it or put a swing in the garden. But excluding costs from the financing (especially for such an essential element) would, to put it mildly, be a bit unwise.
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