Hello,
Actually, we have been looking for an existing property since last summer. According to our mortgage broker, we have a budget of around 300,000 (all-in), which a bank is likely to approve.
The market here in Schleswig-Holstein has also become very tight, and the houses on offer are often in need of renovation, so you easily exceed the budget (especially since many city dwellers laugh at our house prices and like to secure a holiday home here).
Now the question is whether it would be possible to build a house within our budget (assuming we can get a building plot). Our requirements are not very high; it doesn’t need to be a huge house. 120 square meters (1300 square feet) would be completely sufficient.
In a neighboring village, plots are currently being developed. The price isn’t fixed yet but is expected to be below 100 euros per square meter. The plots are about 700 square meters (7500 square feet) in size. Unfortunately, we have no experience with this topic at all, and I definitely don’t want to miscalculate.
We can only contribute limited personal labor. We are not unskilled, but both fully employed with a child, dog, and horse. What are your thoughts?
Actually, we have been looking for an existing property since last summer. According to our mortgage broker, we have a budget of around 300,000 (all-in), which a bank is likely to approve.
The market here in Schleswig-Holstein has also become very tight, and the houses on offer are often in need of renovation, so you easily exceed the budget (especially since many city dwellers laugh at our house prices and like to secure a holiday home here).
Now the question is whether it would be possible to build a house within our budget (assuming we can get a building plot). Our requirements are not very high; it doesn’t need to be a huge house. 120 square meters (1300 square feet) would be completely sufficient.
In a neighboring village, plots are currently being developed. The price isn’t fixed yet but is expected to be below 100 euros per square meter. The plots are about 700 square meters (7500 square feet) in size. Unfortunately, we have no experience with this topic at all, and I definitely don’t want to miscalculate.
We can only contribute limited personal labor. We are not unskilled, but both fully employed with a child, dog, and horse. What are your thoughts?
SumsumBiene31 Dec 2020 17:59We’re not dismissing this idea yet, which is why I wrote “intuitively.”
I ran it through four different platforms. The price range is between 250,000 and 330,000.
139 square meters (1,495 square feet) on the ground floor, the attic is fully developed but due to the ceiling height it’s not counted as a separate apartment (though it’s open to above… really nice). The basement is 70 square meters (750 square feet), heated. The kitchen is 12 years old and will stay. The stove in the living room is only two years old.
So, if you can manage the repayments during retirement?
… That’s not happening right now, thanks to our low-wage sector jobs.
I ran it through four different platforms. The price range is between 250,000 and 330,000.
139 square meters (1,495 square feet) on the ground floor, the attic is fully developed but due to the ceiling height it’s not counted as a separate apartment (though it’s open to above… really nice). The basement is 70 square meters (750 square feet), heated. The kitchen is 12 years old and will stay. The stove in the living room is only two years old.
nordanney schrieb:
No problem if you have a reasonably good pension (wherever that comes from).
I finalized in the summer with a projected term of 40 years – then I’ll be 88.
So, if you can manage the repayments during retirement?
… That’s not happening right now, thanks to our low-wage sector jobs.
N
nordanney31 Dec 2020 18:19SumsumBiene schrieb:
So, if you can afford the repayments during retirement?Yes, the bank wants to get its money back. And you cannot contractually agree on repayment through selling the property.M
motorradsilke31 Dec 2020 18:30SumsumBiene schrieb:
So, if you can still make the payments after retirement?
... At the moment, that’s not likely, due to our low-wage sector jobs. There are definitely other financing models. Some acquaintances have set their payments so low that they probably won’t pay off the house within their lifetime. You should just get advice from a financial consultant.
W
WilderSueden31 Dec 2020 18:42Then you end up paying interest for a very long time, and relative to the installment, it is quite a lot. Putting aside the risk that interest rates might not stay at 1% but rise to 4% in 15 years, which can be especially problematic with low principal repayments combined with a high remaining debt.
If the bank agrees to this, I would rather repay most of the debt before retirement and then arrange a change in the installment plan after retirement so that the remaining debt is paid off more slowly. Alternatively, since you have the right to terminate the contract after 10 years anyway, you can terminate the old contract and take out a new one for the remaining debt. However, this requires the bank to offer financing that it can be expected you will no longer be able to afford during retirement installments.
If the bank agrees to this, I would rather repay most of the debt before retirement and then arrange a change in the installment plan after retirement so that the remaining debt is paid off more slowly. Alternatively, since you have the right to terminate the contract after 10 years anyway, you can terminate the old contract and take out a new one for the remaining debt. However, this requires the bank to offer financing that it can be expected you will no longer be able to afford during retirement installments.
M
motorradsilke31 Dec 2020 18:44WilderSueden schrieb:
If the bank agrees, I would prefer to pay off most of the debt before retirement and then arrange a loan term adjustment after retirement so that the remaining balance is paid off more slowly. Alternatively, since you have the right to terminate the contract after 10 years anyway, you could cancel the old contract and take out a new one for the remaining debt. However, this requires that the bank provides financing that realistically cannot be fully repaid with the regular payment during retirement.
That’s how I thought about it too. First a higher payment, then a lower one once the higher payment is no longer affordable.
SumsumBiene31 Dec 2020 18:52Ok. To be more specific, this needs to be examined more closely. There are also two Riester contracts that can at least be used for repayment. Currently, they amount to 15'.