Hello,
I have read through the forum a few times and have now registered.
I definitely plan to build a house within the next few years. However, I haven’t really dealt with the topic in detail yet. Currently, with the low interest rates, I feel like I might be missing a good opportunity. So I’m wondering whether I should just start planning now. After all, every month I invest in my own home is a month gained.
I would like to build on my parents’ land, so those costs would be eliminated. The house I like costs about 150,000 euros. I can’t say the exact amount right now. I am thinking about taking out a loan of around 170,000–180,000 euros. Unfortunately, my equity is currently quite limited.
Since I don’t have to buy land, I don’t consider the loan amount to be too high. That’s why the low equity doesn’t discourage me much. The monthly payments on a loan of this size should be manageable.
I am a civil servant and currently earn between 2,300 and 2,500 euros net per month. My wife is still studying at the moment. Her salary will probably be added next year. But even with just my income, the project seems feasible.
What do you think? Should I save a bit more or move forward with my plan quickly?
Unfortunately, I don’t know the best way to approach my project at this point. What would be the first steps? Probably going to the bank and running the numbers first.
At the moment, I pay 639 euros for rent including utilities. I can save about 500 euros per month. That’s practically the amount I would have available each month.
According to online calculators, my loan amount with a 10-year fixed interest and 2% repayment rate would cost about 800–900 euros per month with an acceptable term.
Am I forgetting something? Is my plan too naive? I’m somewhat unsure because building a house is a big step.
Thanks in advance!!!!
I have read through the forum a few times and have now registered.
I definitely plan to build a house within the next few years. However, I haven’t really dealt with the topic in detail yet. Currently, with the low interest rates, I feel like I might be missing a good opportunity. So I’m wondering whether I should just start planning now. After all, every month I invest in my own home is a month gained.
I would like to build on my parents’ land, so those costs would be eliminated. The house I like costs about 150,000 euros. I can’t say the exact amount right now. I am thinking about taking out a loan of around 170,000–180,000 euros. Unfortunately, my equity is currently quite limited.
Since I don’t have to buy land, I don’t consider the loan amount to be too high. That’s why the low equity doesn’t discourage me much. The monthly payments on a loan of this size should be manageable.
I am a civil servant and currently earn between 2,300 and 2,500 euros net per month. My wife is still studying at the moment. Her salary will probably be added next year. But even with just my income, the project seems feasible.
What do you think? Should I save a bit more or move forward with my plan quickly?
Unfortunately, I don’t know the best way to approach my project at this point. What would be the first steps? Probably going to the bank and running the numbers first.
At the moment, I pay 639 euros for rent including utilities. I can save about 500 euros per month. That’s practically the amount I would have available each month.
According to online calculators, my loan amount with a 10-year fixed interest and 2% repayment rate would cost about 800–900 euros per month with an acceptable term.
Am I forgetting something? Is my plan too naive? I’m somewhat unsure because building a house is a big step.
Thanks in advance!!!!
haeuslebauer14 May 2010 08:45Additional Costs
Hello BARBQ,
Currently, two positive factors support your future plans. First, the fact that you already own the land, and second, your civil servant status. From our experience, this is usually enough for banks to approve the loan for you. Possibly with the condition that you have to use both the house and the land as collateral. Otherwise, it generally isn’t possible!
What you must not forget are the additional construction costs. Depending on the project, these can easily range between 20,000 and 30,000 euros. Additional construction costs typically include the following items:
- Surveying services
- Connection to public utilities (gas, water, electricity)
- Excavation and earthworks, depending on the builder
- Property taxes
- Notary fees
- Etc.
Usually, these so-called construction and additional costs are not financed by banks. A clarifying discussion with your local bank should provide more transparency. This can also vary depending on the bank.
Nevertheless, I would recommend starting your savings plan now. Keep in mind that you might also need new furniture, a new kitchen, or other furnishings (lighting, lamps, etc.). Depending on size and features, a kitchen alone can easily cost over 20,000 euros. These items are definitely not covered by the mortgage.
Another important consideration when planning your house is family planning. When and how many children do you want, and do you have concrete plans? It might sound theoretical, but you should always budget a financial buffer here. In the worst case, your partner might not be able to work for several years, and the income you planned for could suddenly be missing!
Apart from that, I would (based on all factors mentioned) recommend starting construction as early as possible. Our personal opinion is that owning a significant part of your retirement accommodation is a very important step right now. Just think about eliminating monthly rent! Rental prices will likely increase over the next 20 to 30 years.
Talk about this with your parents as well—they often have good ideas (;)) and, of course, with your bank or financing advisor. It’s best to get several opinions.
We wish you the best of luck!
BARBQ schrieb:
What do you think? Should I save a bit more or quickly put my idea into action?
At the moment, I pay a total rent of 639 euros. I can save about 500 euros per month. That is basically the amount available each month.
According to online calculators, my loan amount with a 10-year fixed interest rate and 2% repayment would cost around 800-900 euros per month with an acceptable term.
Am I forgetting something? Is my idea too naive? I am somewhat unsure since building a house is a big step.
Thanks in advance!!!!
Hello BARBQ,
Currently, two positive factors support your future plans. First, the fact that you already own the land, and second, your civil servant status. From our experience, this is usually enough for banks to approve the loan for you. Possibly with the condition that you have to use both the house and the land as collateral. Otherwise, it generally isn’t possible!
What you must not forget are the additional construction costs. Depending on the project, these can easily range between 20,000 and 30,000 euros. Additional construction costs typically include the following items:
- Surveying services
- Connection to public utilities (gas, water, electricity)
- Excavation and earthworks, depending on the builder
- Property taxes
- Notary fees
- Etc.
Usually, these so-called construction and additional costs are not financed by banks. A clarifying discussion with your local bank should provide more transparency. This can also vary depending on the bank.
Nevertheless, I would recommend starting your savings plan now. Keep in mind that you might also need new furniture, a new kitchen, or other furnishings (lighting, lamps, etc.). Depending on size and features, a kitchen alone can easily cost over 20,000 euros. These items are definitely not covered by the mortgage.
Another important consideration when planning your house is family planning. When and how many children do you want, and do you have concrete plans? It might sound theoretical, but you should always budget a financial buffer here. In the worst case, your partner might not be able to work for several years, and the income you planned for could suddenly be missing!
Apart from that, I would (based on all factors mentioned) recommend starting construction as early as possible. Our personal opinion is that owning a significant part of your retirement accommodation is a very important step right now. Just think about eliminating monthly rent! Rental prices will likely increase over the next 20 to 30 years.
Talk about this with your parents as well—they often have good ideas (;)) and, of course, with your bank or financing advisor. It’s best to get several opinions.
We wish you the best of luck!