ᐅ Planning a house build—where do you start?

Hello, I have been reading this interesting forum for a while now. It is finally time for me to ask some questions.

A bit about us: My wife and I live in Schweinfurt (Bavaria). We have a 1-year-old daughter and a 2.5-year-old son. At the moment, we are still renting, but we plan to build a house this year.

Now the question arises: What should be done first when you want to build a house? So far, we have registered with the city for a plot of land, as a new residential area is currently being developed here. Unfortunately, we do not yet know if we will get a plot (allocation will be in March), although our chances are quite good. We are a young family with two small children, my wife and I are 32 years old, so we fit the city’s target group (young families with children).

What can we do now to use the time until the plot allocation effectively? Should we already talk to the bank? But as long as we don’t have a plot, I don’t know what it will cost or what kind of house we are allowed to build there (size?).

What should our next step be? We would really appreciate any help you can offer.

Initial discussions with the bank to establish a rough financing framework are certainly helpful. However, if it is clear from the start that no funds are available for construction, then proceeding further does not make sense.

It also does no harm to gather ideas about which house or type of house is preferred.

Hello Thelocalwiseman,

Three years ago, there was also talk of developing a new housing area here, but since a farmer opposed it... well, that's another story. It was never planned as building land anyway; the idea was just to control the water runoff from the fields onto the road. NEVER MIND. We then bought a plot that had been lying fallow for years, fully serviced. We took a piece of paper, sketched the plot, marked the building area, and thought about what we wanted. A single-family house with a granny flat.

Then we started drawing and designing. Our advantage was that we had no children, no urgency, and we were young... For you, I would do it like this: take both site plans and design a house that fits on both plots. Once you have a plan, get quotes from various builders or contractors (whether you actually build with them or not doesn’t matter). That way, you get a ballpark price. With that, you go to your bank and negotiate the terms. And then it’s already March.

Regards

First of all, before any dreaming starts, establish your financial framework. Without knowing this, every further step is pointless.

This includes your current monthly expenses, any loans, equity, etc. Also keep in mind that a house generates more additional costs than a rental apartment. And you need to build up sufficient reserves.

We also started with a budget plan, including monthly income and expenses. But EVERYTHING, from the obvious like phone and daycare to the annual car insurance plus taxes, public broadcasting fees, and personal liability insurance.

Then I reviewed bank statements from the last 9 months and calculated the average utility costs (food, drinks, hygiene), fuel, gifts, leisure activities, and other expenses—rounding generously. I added savings on top of that and then looked at what remains (rent will be deducted).

This amount is the maximum monthly repayment you can afford to pay to the bank.

Then the bank tells you how much they can lend you at most. This already shows whether it’s feasible at all.

The most important thing is that you are honest with yourself as a builder. Otherwise, you’re just wasting your time.

Thank you for your help. I have already created a cost plan showing the monthly expenses and income, and I will arrange a meeting with the bank to see if we are eligible for a loan.