ᐅ Building a House with €50,000 Equity / Is a Net Income of €2,500 Enough?
Created on: 2 Aug 2015 18:06
S
SandorHello everyone,
We would like to briefly introduce ourselves:
We are a young couple, both 25 years old. We have been thinking about building a house for some time now. (We find both solid construction and prefab houses to be good options.) Located in Saxony. We want to build a turnkey house where nothing more needs to be done except maybe wallpapering and flooring. Our idea would be a bungalow of about 110 m² (1,185 sq ft). Land size around 600–800 m² (6,460–8,600 sq ft), with prices ranging from 20 to 40 euros per m² (2 to 4 USD per sq ft). We have a combined income of 2,500 euros (USD 2,700) – me: 1,500 euros (USD 1,600), my wife: 1,000 euros (USD 1,100). We have equity of 50,000 euros (USD 54,000).
Our questions:
- Is it possible to build a turnkey house including the land, all additional costs (notary, transfer tax, utility connections, etc.), garden, kitchen, and everything else for 200,000 euros (USD 215,000)? That would mean 50,000 euros (USD 54,000) equity and a 150,000 euro (USD 161,000) mortgage.
- Would we be able to get a loan of 150,000 euros (USD 161,000)? (We have a bank appointment coming up.)
- If that is not feasible, what kind of costs should we expect?
Thank you in advance for your help!
Best regards
We would like to briefly introduce ourselves:
We are a young couple, both 25 years old. We have been thinking about building a house for some time now. (We find both solid construction and prefab houses to be good options.) Located in Saxony. We want to build a turnkey house where nothing more needs to be done except maybe wallpapering and flooring. Our idea would be a bungalow of about 110 m² (1,185 sq ft). Land size around 600–800 m² (6,460–8,600 sq ft), with prices ranging from 20 to 40 euros per m² (2 to 4 USD per sq ft). We have a combined income of 2,500 euros (USD 2,700) – me: 1,500 euros (USD 1,600), my wife: 1,000 euros (USD 1,100). We have equity of 50,000 euros (USD 54,000).
Our questions:
- Is it possible to build a turnkey house including the land, all additional costs (notary, transfer tax, utility connections, etc.), garden, kitchen, and everything else for 200,000 euros (USD 215,000)? That would mean 50,000 euros (USD 54,000) equity and a 150,000 euro (USD 161,000) mortgage.
- Would we be able to get a loan of 150,000 euros (USD 161,000)? (We have a bank appointment coming up.)
- If that is not feasible, what kind of costs should we expect?
Thank you in advance for your help!
Best regards
Hello,
of course, regulations vary from state to state, and personal needs also play a role, but with that amount you can definitely build a turnkey house. Maybe not self-designed with architects and so on, but as a prefabricated house.
And some banks might also be willing to support this, provided it is manageable for them in terms of calculations (income, expenses, basic social security for 2 people, insurance, installments, maintenance costs...).
of course, regulations vary from state to state, and personal needs also play a role, but with that amount you can definitely build a turnkey house. Maybe not self-designed with architects and so on, but as a prefabricated house.
And some banks might also be willing to support this, provided it is manageable for them in terms of calculations (income, expenses, basic social security for 2 people, insurance, installments, maintenance costs...).
It will be tight – but I would say it’s probably possible, at least with 110 sqm (1,184 sq ft).
700 sqm (7,535 sq ft) at €40 plus purchase-related costs and possibly notary fees around €32,000
€40,000 additional construction costs
That leaves about €1,200 per sqm (111 per sq ft) – maybe it’s safer to calculate with €1,400 per sqm (130 per sq ft) and possibly take out €30,000 more?
There shouldn’t be any problems with the bank as long as the employment contracts aren’t temporary. For example, a 3% repayment and 2.5% interest rate would mean a monthly payment of about €690.
Now, a few questions:
Do you want children? Then 110 sqm (1,184 sq ft) might be a bit small.
Do you want to commit forever? This is more serious than a wedding.
Look at the offers you get and ask yourself if the standard fits your needs.
700 sqm (7,535 sq ft) at €40 plus purchase-related costs and possibly notary fees around €32,000
€40,000 additional construction costs
That leaves about €1,200 per sqm (111 per sq ft) – maybe it’s safer to calculate with €1,400 per sqm (130 per sq ft) and possibly take out €30,000 more?
There shouldn’t be any problems with the bank as long as the employment contracts aren’t temporary. For example, a 3% repayment and 2.5% interest rate would mean a monthly payment of about €690.
Now, a few questions:
Do you want children? Then 110 sqm (1,184 sq ft) might be a bit small.
Do you want to commit forever? This is more serious than a wedding.
Look at the offers you get and ask yourself if the standard fits your needs.
Hello tooly26,
That sounds pretty good so far. Our expenses aren’t too high: two Riester pensions, a car, two mobile phone contracts, and a couple of insurances.
I just wanted to hear a few opinions because we were told that you need a net income of at least 4000 euros.
Thanks for the reply.
Hello BeHaElja,
Thank you for your answer!
Definitely one child! No more than that.
(unless it ends up being twins)
We would also like more than 110 m² (1,184 sq ft),
but we think that’s not feasible with our budget. (which is why we’re here) Also, in old age, it might not be a bad thing to have a bit less rather than too much.
Yes, you want to commit for life! Otherwise, you wouldn’t think so far ahead. What happens in life can never be fully planned, in case it ends at some point. But if we thought like that, we might as well not try at all!
That sounds pretty good so far. Our expenses aren’t too high: two Riester pensions, a car, two mobile phone contracts, and a couple of insurances.
I just wanted to hear a few opinions because we were told that you need a net income of at least 4000 euros.
Thanks for the reply.
Hello BeHaElja,
Thank you for your answer!
Definitely one child! No more than that.
(unless it ends up being twins)
We would also like more than 110 m² (1,184 sq ft),
but we think that’s not feasible with our budget. (which is why we’re here) Also, in old age, it might not be a bad thing to have a bit less rather than too much.
Yes, you want to commit for life! Otherwise, you wouldn’t think so far ahead. What happens in life can never be fully planned, in case it ends at some point. But if we thought like that, we might as well not try at all!
The required net amount depends heavily on the region and the type of house you are aiming for.
A 150 m² (1,615 sq ft) house in Baden-Württemberg will certainly need around €4,000 net, but with a 400 m² (4,300 sq ft) plot, the total cost would be around €450,000 (just rough estimates). With your €50,000 equity, that would mean monthly repayments of about €1,850.
With your €50,000 equity and a loan amount between €150,000 and €180,000, you actually have a good financing range.
As an exercise, you could keep a household budget diary for 2-3 months to see how many expenses you really have each month.
A 150 m² (1,615 sq ft) house in Baden-Württemberg will certainly need around €4,000 net, but with a 400 m² (4,300 sq ft) plot, the total cost would be around €450,000 (just rough estimates). With your €50,000 equity, that would mean monthly repayments of about €1,850.
With your €50,000 equity and a loan amount between €150,000 and €180,000, you actually have a good financing range.
As an exercise, you could keep a household budget diary for 2-3 months to see how many expenses you really have each month.