ᐅ House Building Planning Process! When Should You Schedule an Appointment with the Bank?

tomtom79 schrieb:

Hey, you’re the one who said you’re going to the bank to ask for more money.

I will make an appointment as soon as I have the offer, and then I will have clarity. Thanks for your help anyway.

Maria16 schrieb:

(By the way: is it just me, or does the summer slump get filled with strange financial inquiries?)

Sometimes I think it would be worth comparing the IP addresses of those asking for help. It’s really odd. As if someone is playing a prank.

There is simply not enough information available to provide you with a concrete response. There are no clear details about your monthly income, equity, house size, quality, or the value of the plot. That would at least be a starting point.

Also, despite the house being described as probably turnkey in your general contractor’s (GC’s) price, many items are likely not included in that price.

In other words, all additional construction-related costs and some smaller expenses that add up are missing.

My guess is that you haven’t dealt enough with the whole topic to understand what financial commitments lie ahead. The architect working with the GC is least involved in the further process. You simply receive an offer from the GC, and it is your responsibility (not theirs) to add all necessary missing items. That will give you the total construction cost plus a contingency. The initial offer alone is worthless.

How do you feel about the build? Would you be able to manage with an income of 320,000 euros (about $350,000) living away from home?

Zaba12 schrieb:

There is simply not enough information available to give you a concrete response. For example, there are no clear details about monthly income, equity, house size, quality, or the value of the land. That would at least be a starting point.

Also, despite the house being described as turnkey (presumably), many costs are likely not included in your general contractor’s price.

In other words, the additional construction-related costs and some smaller expenses that add up are missing.

My guess is that you haven’t yet dealt enough with the whole topic to know what financial commitments you are facing.

What is your gut feeling about building—would you be able to manage with a combined income of 320,000€ (approx.)?

Yes, you’re right. We are still at the beginning of the planning process and need to gather much more information. Our combined net income is about 4,000 Euro (approximately). The house will be around 135 sq meters (1,450 sq ft) — the floor plan is still being developed. We are still working on the equity plan, probably around 60,000 Euro (approximately), of which we intend to reserve 30,000 Euro (approximately) as equity for the bank and 30,000 Euro (approximately) for additional construction-related costs. The land is valued at about 50,000 Euro (approximately).

As you said, we are just getting started and are currently informing ourselves. My parents have now effectively transferred the land to me, which is why this idea came up rather suddenly and spontaneously.

zipfelklatsch schrieb:

Yes, you’re right. We are still at the very beginning of the planning phase and need to gather more information. Our combined net income is about 4000 Euro per month. The house will be around 135 sqm (1450 sq ft) – the floor plan is still being created. We are still working on the equity plan. Probably around 60k Euro, of which we want to reserve 30k Euro as equity for the bank and 30k Euro for additional building costs. The plot is valued at about 50k Euro.

As you nicely said, we are just starting and are currently informing ourselves. My parents basically gifted me the plot, so the idea came up rather quickly and spontaneously.

Let’s summarize:
- 4k Euro monthly income (is this monthly net income or have you included bonuses and holiday/Christmas pay? For calculating the loan amount, only the regular monthly income counts).
- Equity consists of the plot plus 30k Euro, totaling 80k Euro. The rest won’t count as equity for the bank unless it is officially declared as such.
- From experience over the last two years, 2k Euro per sqm of living space is a realistic figure for calculation.

That would be 270k Euro for the house and all on-site work. Let’s keep the 30k Euro for additional building-related costs aside. However, costs like purchase-related expenses (notary/land registry) are not included here.

So initially, 300k Euro without landscaping, garage/carport, painting, flooring, lighting, kitchen, furnishings, etc.

A turnkey property, with everything finished, would probably cost around 365k Euro. That means 365k minus 30k equals a loan of 335k Euro. That results in a loan-to-value ratio just over 90%. You can use any standard home loan calculator to estimate your monthly payments plus around 400 Euro monthly for property-related additional costs = your total housing expense.

Zaba12 schrieb:

Let’s summarize:
- €4,000 monthly income (is this monthly or does it include bonuses and holiday/Christmas pay? For the loan amount, only the regular monthly income counts).
- Equity consists of the land and €30,000, totaling €80,000. The rest does not matter to the bank unless it is declared as equity.
- Based on experience over the last two years, €2,000 per square meter (approximately 0.09 square feet) of living space is a realistic figure for budgeting.

That would mean €270,000 for the house and all on-site construction work. Let’s keep the €30,000 for additional construction-related costs. However, things like purchase-related fees (notary/land registry) are not included here.

So initially €300,000 without landscaping, garage/carport, painting, flooring, lighting, kitchen, furnishings, etc.

For a ready-to-move-in home where everything is finished, you would probably be at €365,000. That means €365,000 minus €30,000 equals a loan of €335,000. This results in a loan-to-value ratio just over 90%. With this, you can use any standard mortgage calculator to estimate your monthly payment plus about €400 monthly for additional housing costs = total housing expenses.

Did not include the land.
So total volume €415,000 with a €335,000 loan. This results in a loan-to-value ratio of 80.7%.