Hello community,
I have already read through many threads, and thanks to Bauexperte and others, I now have a realistic idea of what our house would cost.
We are currently a family of four. My wife (27) will start a well-paid part-time job this fall, and I (38) will become a civil servant in July. In short, from October on, we will have about 3000 euros of disposable income after all expenses. We currently rent at a reasonable price thanks to a federal housing program, and we also live in an idyllic setting in one of the nicest districts of Cologne, next to a park, in a quiet residential area. The 3 rooms are enough for the two of us and our two small daughters, but we still wish to have 2-3 more children in the next 10 years.
As equity, excluding our emergency reserve of 25,000 euros, we have the sale proceeds of about 150,000 euros from my parents’ terraced house, which is still rented out. The plot of land (305m2 (3283 sq ft)) would cost 100,000 euros if we were awarded the purchase.
For the house, we had in mind a semi-detached house with a full basement, geothermal heat pump, a converted attic, and a garage. The house size would be 7x12m (23x39 feet), which means about 170m2 (1830 sq ft) of living space.
After a conservative estimate, including Bauexperte’s experience, I came to 370,000 euros for the house including all additional construction costs, garage, garden, etc., with a 10,000 euro buffer.
That would mean we would need a loan of around 320,000 euros.
Originally, before I found this forum, I had looked at prices for single-family and semi-detached houses from manufacturers, and rough estimates were mostly around 250,000 euros. But I did not realize there would be so many additional expenses. I was mentally prepared for a loan of 200,000 euros, but the extra 120,000 euros seem quite hefty for us to manage. I had no idea that building a house would be this expensive. The problem is that right now we would be building somewhat beyond our current needs, but considering more children on the way, we would need that space reserved. I don’t know if it makes sense to limit ourselves to 120m2 (1290 sq ft) and then, with 2-3 additional children in 10 years, find out our house is too small… to then sell and build new?
On the other hand, a loan of 320,000 euros feels astronomical. At a 3-4% repayment rate, it would take about 18-20 years to be debt-free. During that time, we would have a maximum of 2000 euros left for living after all obligations are paid.
So my general consideration and request for your feedback is this: we are currently thinking about giving up the house-building project and continuing to rent. If the need arises with child number 3 or 4, we would have to move out anyway. Possibly, buying the apartment in the coming years at special conditions could be an option, and later selling it for a profit on the open market (from when do you not have to pay taxes on that?). That would increase our equity, but I think this would be a question of about 10 years.
On the other hand, building and living in a larger home would mean using the space with the children now, instead of waiting 10 years to buy or build when more equity is available. And when do children really need a house? I believe especially when they are small, right?
What are your thoughts on our situation? What would you advise?
So far, we have lived without any debt – what is it like to have a high monthly repayment? Is there still money left for vacations, investments, or does the house become the all-dominant center of life for the next 10-15 years?
Thank you for your opinions!
Best regards
sw1008
I have already read through many threads, and thanks to Bauexperte and others, I now have a realistic idea of what our house would cost.
We are currently a family of four. My wife (27) will start a well-paid part-time job this fall, and I (38) will become a civil servant in July. In short, from October on, we will have about 3000 euros of disposable income after all expenses. We currently rent at a reasonable price thanks to a federal housing program, and we also live in an idyllic setting in one of the nicest districts of Cologne, next to a park, in a quiet residential area. The 3 rooms are enough for the two of us and our two small daughters, but we still wish to have 2-3 more children in the next 10 years.
As equity, excluding our emergency reserve of 25,000 euros, we have the sale proceeds of about 150,000 euros from my parents’ terraced house, which is still rented out. The plot of land (305m2 (3283 sq ft)) would cost 100,000 euros if we were awarded the purchase.
For the house, we had in mind a semi-detached house with a full basement, geothermal heat pump, a converted attic, and a garage. The house size would be 7x12m (23x39 feet), which means about 170m2 (1830 sq ft) of living space.
After a conservative estimate, including Bauexperte’s experience, I came to 370,000 euros for the house including all additional construction costs, garage, garden, etc., with a 10,000 euro buffer.
That would mean we would need a loan of around 320,000 euros.
Originally, before I found this forum, I had looked at prices for single-family and semi-detached houses from manufacturers, and rough estimates were mostly around 250,000 euros. But I did not realize there would be so many additional expenses. I was mentally prepared for a loan of 200,000 euros, but the extra 120,000 euros seem quite hefty for us to manage. I had no idea that building a house would be this expensive. The problem is that right now we would be building somewhat beyond our current needs, but considering more children on the way, we would need that space reserved. I don’t know if it makes sense to limit ourselves to 120m2 (1290 sq ft) and then, with 2-3 additional children in 10 years, find out our house is too small… to then sell and build new?
On the other hand, a loan of 320,000 euros feels astronomical. At a 3-4% repayment rate, it would take about 18-20 years to be debt-free. During that time, we would have a maximum of 2000 euros left for living after all obligations are paid.
So my general consideration and request for your feedback is this: we are currently thinking about giving up the house-building project and continuing to rent. If the need arises with child number 3 or 4, we would have to move out anyway. Possibly, buying the apartment in the coming years at special conditions could be an option, and later selling it for a profit on the open market (from when do you not have to pay taxes on that?). That would increase our equity, but I think this would be a question of about 10 years.
On the other hand, building and living in a larger home would mean using the space with the children now, instead of waiting 10 years to buy or build when more equity is available. And when do children really need a house? I believe especially when they are small, right?
What are your thoughts on our situation? What would you advise?
So far, we have lived without any debt – what is it like to have a high monthly repayment? Is there still money left for vacations, investments, or does the house become the all-dominant center of life for the next 10-15 years?
Thank you for your opinions!
Best regards
sw1008
Depending on what you want to build, it can take some time before your contractor starts. In our case, the builder didn’t begin until the financing was fully secured, meaning the contract was signed. Without this approval, you end up paying a lot of money for funds you haven’t even accessed yet.
We had to wait almost 11 months for our prefabricated house. Then the invoices also come in stages...
That’s why it’s important.
We had to pay interest on the funds withheld (preliminary interest) for 2 months on €50,000 (about $54,000), and that really hurt since you don’t get anything in return for the money spent.
We had to wait almost 11 months for our prefabricated house. Then the invoices also come in stages...
That’s why it’s important.
We had to pay interest on the funds withheld (preliminary interest) for 2 months on €50,000 (about $54,000), and that really hurt since you don’t get anything in return for the money spent.
Are the repayments due immediately or only after the amount has been drawn? And how does it work in the first year if only part of the amount is drawn—are the interest charges applied to the total amount or only to the drawn portion? Because then, from a calculation perspective, the repayment in the first year would actually be higher...