Hello and greetings to everyone!
As a "newcomer" here in the forum (my first step out of anonymous reading, so to speak...), I am curious about your opinions and especially looking forward to your advice.
My partner and I (both 33 years old) currently have the opportunity to purchase a truly (for us) beautiful plot of land. The plot is located in Lower Saxony, Germany (more rural area). My partner is a civil servant and I am an employee.
About the plot:
approximately 1,013 sqm (11,000 sq ft), new development area, around EUR 190,000 plus additional costs.
Obligation to build by mid-2026.
Our financial framework is as follows (net income):
Me: EUR 6,800 per month
Partner: EUR 2,700 per month.
Current equity of EUR 100,000 (mostly in stocks), no debts.
Due to the current situation with high construction costs and high interest rates, we do not want to build right now. Instead, we plan to start construction in the second half of 2025.
After weighing all the (to my knowledge) advantages and disadvantages of financing the land and the house separately, I have currently requested financing for the land and received the following offer:
Net loan of EUR 170,000 at 3.78% nominal interest p.a., fixed for 10 years, with 4% repayment (equity use about EUR 33,000). At the same time, I negotiated with the bank that in 2025 they will subordinate up to an amount X (=> house financing) so that I should have maximum flexibility in choosing the financing partner at that time (if I’m not overlooking anything).
Despite this, which I consider a really good offer, two points are troubling us currently. On the one hand, of course, we are very annoyed that we are apparently 2 years too late for this (that’s the emotional aspect), and on the other hand, we have significant concerns about the overall financing of house and land. I actually see no reason why we should have to pay more than a maximum (!!) of EUR 3,000 per month for repaying the house loan later – I would prefer to keep this amount between EUR 2,500 and EUR 2,800 (wishes...).
Now, of course, I also put some figures into Excel with the following parameters:
Equity in 2025: EUR 120,000 (EUR 65,000 remaining now plus saving rate of EUR 2,500 per month)
Interest rate: 4% p.a. (pure guesswork)
Initial repayment: 2%
My result:
After deducting all these positions, we can actually afford a house for only EUR 355,000? Am I missing something here? Am I making a mistake or is the situation really as unusual as it seems?
Do you maybe have some ideas or tips regarding your approach? We are currently extremely uncertain...
Thanks in advance and have a great start to the weekend!
Basti
As a "newcomer" here in the forum (my first step out of anonymous reading, so to speak...), I am curious about your opinions and especially looking forward to your advice.
My partner and I (both 33 years old) currently have the opportunity to purchase a truly (for us) beautiful plot of land. The plot is located in Lower Saxony, Germany (more rural area). My partner is a civil servant and I am an employee.
About the plot:
approximately 1,013 sqm (11,000 sq ft), new development area, around EUR 190,000 plus additional costs.
Obligation to build by mid-2026.
Our financial framework is as follows (net income):
Me: EUR 6,800 per month
Partner: EUR 2,700 per month.
Current equity of EUR 100,000 (mostly in stocks), no debts.
Due to the current situation with high construction costs and high interest rates, we do not want to build right now. Instead, we plan to start construction in the second half of 2025.
After weighing all the (to my knowledge) advantages and disadvantages of financing the land and the house separately, I have currently requested financing for the land and received the following offer:
Net loan of EUR 170,000 at 3.78% nominal interest p.a., fixed for 10 years, with 4% repayment (equity use about EUR 33,000). At the same time, I negotiated with the bank that in 2025 they will subordinate up to an amount X (=> house financing) so that I should have maximum flexibility in choosing the financing partner at that time (if I’m not overlooking anything).
Despite this, which I consider a really good offer, two points are troubling us currently. On the one hand, of course, we are very annoyed that we are apparently 2 years too late for this (that’s the emotional aspect), and on the other hand, we have significant concerns about the overall financing of house and land. I actually see no reason why we should have to pay more than a maximum (!!) of EUR 3,000 per month for repaying the house loan later – I would prefer to keep this amount between EUR 2,500 and EUR 2,800 (wishes...).
Now, of course, I also put some figures into Excel with the following parameters:
Equity in 2025: EUR 120,000 (EUR 65,000 remaining now plus saving rate of EUR 2,500 per month)
Interest rate: 4% p.a. (pure guesswork)
Initial repayment: 2%
My result:
| EUR 460,000 | Possible total financing (equity plus debt) |
| EUR 10,000 | Buffer |
| EUR 40,000 | Additional costs |
| EUR 20,000 | Kitchen |
| EUR 390,000 | Subtotal |
| EUR 35,000 | Outdoor facilities |
| EUR 355,000 | Construction costs |
After deducting all these positions, we can actually afford a house for only EUR 355,000? Am I missing something here? Am I making a mistake or is the situation really as unusual as it seems?
Do you maybe have some ideas or tips regarding your approach? We are currently extremely uncertain...
Thanks in advance and have a great start to the weekend!
Basti
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xMisterDx22 Jan 2023 15:04WilderSueden schrieb:
Lunos ventilation systems have been around for more than two years. But yes, they have added some features. Offering gas heating and radiators as the standard option was probably quite off-putting, especially with gas prices exceeding 20 cents per kWh (kilowatt-hour) 😉
However, you have to be careful not to equate things that aren’t the same. Daikin heat pumps, for example, tend to have a lower reputation and likely shorter durability. Could these be contractors who prefer to sell the more expensive Vaillant or Buderus systems because they make higher profits from them?
You can easily convince yourself that contractor group X does poor work for Town & Country and then mentally switch when they work next door on architect-designed houses.
In the end, it looks like this: everyone uses the same basics, and most of the contractors working in this building area are largely the same, even though 20 different builders are active here. What the contractor doesn’t earn with Town & Country, due to price pressure, they make up for next door. And those next-door customers think, “Wow, this one is expensive; they must do really good work”—when in reality, they’re just paying the regular walk-in customer price.
It’s the same everywhere. At the tattoo parlor, Mandy pays the same price for her two characters as the regular customer pays for a full upper arm tattoo.
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baristabasti22 Jan 2023 15:54xMisterDx schrieb:
But anyone who already feels overwhelmed with 350,000 EUR and a net income of 9,500 should probably avoid building altogether?
No offense, but everyone naturally has their own risk tolerance and expectations when it comes to finances (no satire). So, all good and your opinion on this is understood.
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Pitiglianio22 Jan 2023 16:29I am not building with Town & Country or Heinz von Heiden myself, but with a local general contractor. However, this "brand obsession" has always bothered me, just like with cars, clothing, and food. In fact, it is mostly nothing more than taking advantage of the customer, who willingly listens to a self-proclaimed expert and whose profit margin is further increased. Those who want to join in...
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WilderSueden22 Jan 2023 21:35xMisterDx schrieb:
The key to Town & Country is simply buying everything in large quantities centrally. A small contractor who buys 50 boilers per year from Vaillant gets very different prices compared to Town & Country, which buys 5,000 heating systems annually. Exactly. And out of the purchasing advantage, the head office takes 90%, and the franchisee takes another 20%. Quality cannot be separated from price. Although this should not be interpreted as brand obsession.
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Pitiglianio23 Jan 2023 10:14Don’t get me wrong… there are definitely quality differences among the various materials and building products. However, whether an unrealistic price premium is justified is another matter.