ᐅ 130 sqm detached house or single-family home within my budget of 220,000
Created on: 28 Jan 2016 13:43
N
nils1985
Dear Forum,
Before my wife and I get in over our heads, I have a question regarding what is possible with a budget of €220,000 plus €20,000 in equity.
We are planning a single-family house in the Bremen/Lower Saxony area. The living area should be around 130 sqm (1,400 sq ft). We do not yet have a plot of land. The land costs approximately €45,000 to €55,000, excluding additional fees. The budget must cover everything, from closing the door to moving in furniture.
Is it even possible to build a single-family house or a modular house within these parameters?
Based on my online research, I find it hard to imagine at the moment.
What construction period or overall timeline should be planned starting from the land purchase?
Which companies would be worth contacting?
Thank you in advance for your answers!
Before my wife and I get in over our heads, I have a question regarding what is possible with a budget of €220,000 plus €20,000 in equity.
We are planning a single-family house in the Bremen/Lower Saxony area. The living area should be around 130 sqm (1,400 sq ft). We do not yet have a plot of land. The land costs approximately €45,000 to €55,000, excluding additional fees. The budget must cover everything, from closing the door to moving in furniture.
Is it even possible to build a single-family house or a modular house within these parameters?
Based on my online research, I find it hard to imagine at the moment.
What construction period or overall timeline should be planned starting from the land purchase?
Which companies would be worth contacting?
Thank you in advance for your answers!
S
Steffen8028 Jan 2016 21:11nils1985 schrieb:
Habe meine Angaben noch einmal korrigiert....Okay. Then you should, no, you must ignore the wife’s income. In that case, you could consider a condominium or an existing property. I wouldn’t recommend it. Better: increase your income, finish planning for children, and save significantly more equity. There are plenty of people who build or buy even in their mid-30s or 40s. I am in my mid-30s myself.
Just don’t let banks talk you into anything 🙂
Regards, Steffen
PS: Alternatively, play the lottery or rob a bank :p
S
Steffen8028 Jan 2016 21:12T21150 schrieb:
There is no one in this forum who is interested in watching young forum members on TV in the show "We Have a Building Ruin" on Sunday afternoon at 17:00.Or with Peter 😀
Steffen80 schrieb:
There are plenty of people who still build or buy a house in their mid-30s or 40s. I’m in my mid-30s myself.
Just don’t let banks push you around 🙂
Regards, Steffen
PS: Alternatively, play the lottery or rob a bank :pI am 50. My wife is 48.
The neighbors across the street in the new build: 61 and 58.
Each their first single-family home, previously rented (or other circumstances).
Thorsten
(who strongly advises against bank robberies and, as a physicist, considers the odds of winning the lottery possible but low... another topic...)
Maybe I can approach this from a different angle as a banker: If you assume you can afford a monthly mortgage payment of 800€ and the bank agrees based on their budget calculation for you, then, with current interest rates, they should be able to offer you a construction loan of around 192,000€.
Calculation: 800€ per month times 12 equals 9,600€ per year you could pay in installments. Assuming you would have to pay 2.5% interest with medium creditworthiness AND that you want/should repay 2.5% (so you finish before retirement), the 9,600€ corresponds to an annuity (interest plus repayment) of 5%. Using a simple rule of three: 9,600 divided by 5 multiplied by 100 equals 192,000€.
Any amount higher than that would frankly be too risky given your income situation OR the repayment period would take forever, which doesn’t make sense either. By the end of the first fixed interest period, you would likely face problems because a large sum would still be outstanding and interest rates will probably be significantly higher than today (today’s interest rates are historically very low; mortgage rates of 5% or more are quite normal in the long term).
Based on your income and the above maximum mortgage amount, I would look for a nice condominium or an affordable existing property priced around 150,000€ to 160,000€ purchase price. If you add the unfortunately additional purchase costs on top of the 150,000€ to 160,000€ (here in NRW, that would be 6.5% property transfer tax, 1.5% notary fees, 0.5% land registry fees, and possibly 3.57% agent’s fee, totaling about 12%), you end up with roughly 170,000€ to 180,000€. This would leave you, including your equity, some buffer for renovations, moving costs, furniture, etc.
If you prefer to be more cautious, you can aim for a lower purchase price—which would definitely be a condominium, which is still great for many families with three or four members (it was for us for many years). In exchange, you could increase repayment, so you can pay off the loan faster thanks to the current favorable interest rates, and with the quickly repaid condo, you build a better equity base for when you move on to a house project in your mid to late thirties.
Calculation: 800€ per month times 12 equals 9,600€ per year you could pay in installments. Assuming you would have to pay 2.5% interest with medium creditworthiness AND that you want/should repay 2.5% (so you finish before retirement), the 9,600€ corresponds to an annuity (interest plus repayment) of 5%. Using a simple rule of three: 9,600 divided by 5 multiplied by 100 equals 192,000€.
Any amount higher than that would frankly be too risky given your income situation OR the repayment period would take forever, which doesn’t make sense either. By the end of the first fixed interest period, you would likely face problems because a large sum would still be outstanding and interest rates will probably be significantly higher than today (today’s interest rates are historically very low; mortgage rates of 5% or more are quite normal in the long term).
Based on your income and the above maximum mortgage amount, I would look for a nice condominium or an affordable existing property priced around 150,000€ to 160,000€ purchase price. If you add the unfortunately additional purchase costs on top of the 150,000€ to 160,000€ (here in NRW, that would be 6.5% property transfer tax, 1.5% notary fees, 0.5% land registry fees, and possibly 3.57% agent’s fee, totaling about 12%), you end up with roughly 170,000€ to 180,000€. This would leave you, including your equity, some buffer for renovations, moving costs, furniture, etc.
If you prefer to be more cautious, you can aim for a lower purchase price—which would definitely be a condominium, which is still great for many families with three or four members (it was for us for many years). In exchange, you could increase repayment, so you can pay off the loan faster thanks to the current favorable interest rates, and with the quickly repaid condo, you build a better equity base for when you move on to a house project in your mid to late thirties.