Hello everyone,
I am married and have a one-year-old son.
My wife and I are both 30 years old.
We come from the area south of Baden-Württemberg – around Freiburg.
Both of us have above-average incomes.
My wife is currently on parental leave.
We finally acquired a plot of land three months ago through a private sale at a reasonable price.
[300m2 (3200 sq ft) for about 125,000 Euros including additional costs].
Now we have gathered several offers from prefabricated house suppliers, both solid construction and timber frame, etc.
When we calculated everything, the total cost of the entire building project—without the land, including additional costs, exterior works, kitchen, etc.—comes to about 600,000 Euros, truly turnkey, with a buffer included.
Here is the problem.
With the current interest rate, despite owning the land outright [equity], we cannot finance it.
The monthly burden is too high (around 2300–2500 Euros, including an L-Bank loan, which is currently basically in limbo with the state bank).
My idea is to buy a condominium first.
(Secure the land, fully paid (125,000 Euros)).
Our current apartment is too small for the long term.
Financing a condominium would be much easier since the loan amount is significantly lower than for building a house.
We will definitely inherit something in the coming years (the older generation has not yet passed anything on in advance, unfortunately, when it was needed).
My plan would be to buy and live in the condo, paying it off monthly.
Once the inheritance comes through, fully pay off the condo and then build the house. That way, we have the security of owning a paid-off condo and monthly rental income to support the repayment of the house loan.
What do you think? Do you have other ideas?
Regards,
Peter
I am married and have a one-year-old son.
My wife and I are both 30 years old.
We come from the area south of Baden-Württemberg – around Freiburg.
Both of us have above-average incomes.
My wife is currently on parental leave.
We finally acquired a plot of land three months ago through a private sale at a reasonable price.
[300m2 (3200 sq ft) for about 125,000 Euros including additional costs].
Now we have gathered several offers from prefabricated house suppliers, both solid construction and timber frame, etc.
When we calculated everything, the total cost of the entire building project—without the land, including additional costs, exterior works, kitchen, etc.—comes to about 600,000 Euros, truly turnkey, with a buffer included.
Here is the problem.
With the current interest rate, despite owning the land outright [equity], we cannot finance it.
The monthly burden is too high (around 2300–2500 Euros, including an L-Bank loan, which is currently basically in limbo with the state bank).
My idea is to buy a condominium first.
(Secure the land, fully paid (125,000 Euros)).
Our current apartment is too small for the long term.
Financing a condominium would be much easier since the loan amount is significantly lower than for building a house.
We will definitely inherit something in the coming years (the older generation has not yet passed anything on in advance, unfortunately, when it was needed).
My plan would be to buy and live in the condo, paying it off monthly.
Once the inheritance comes through, fully pay off the condo and then build the house. That way, we have the security of owning a paid-off condo and monthly rental income to support the repayment of the house loan.
What do you think? Do you have other ideas?
Regards,
Peter
Finch039 schrieb:
With the partner working part-time, we would have a household income of about €4,400 (approx. $4,800). Then finance with a €2,000 (approx. $2,200) monthly payment? The ratio isn’t great, that’s true. But I could also look at it from the other side: that leaves €2,400 (approx. $2,600) per month just for utilities, insurance, living expenses, and other savings. The question then is: does that add up? Has it worked so far? Will it work with one or two children? Is there enough buffer to avoid problems at the first setback? And can I still sleep well at night? The original poster is not at the end of their career, so this ratio will likely improve over time. On the other hand, young families don’t want to have to scrimp and save all the time either. When increased expenses (such as mortgage payment plus child costs) and reduced income (such as parental leave) occur together, even someone who previously had a decent savings rate may suddenly realize that it doesn’t fit without compromises (which is no shame—it’s completely normal for someone with a higher income to afford a higher standard of living). For someone else, it might still fit comfortably, but that depends on the individual situation.
So, for me, I would first review the expenditure side. For example, the questionnaire pinned in this section can help. Or you can keep your own household budget. Or you simply go through your expenses and bank statements from the last one to two years and categorize them. (And don’t underestimate the "that was just a one-time high expense" costs. Usually you don’t buy a new washing machine, car, bed, etc., every year, but there’s always something, so first list everything honestly and see where you stand.)
About 400€ Z15 loan
The bank offered 375,000 (approximately 414,000 USD) at 4.1% interest with 2% repayment, which comes to around 1,950 to 2,350€ per month (approximately 2,150 to 2,590 USD).
Both the bank and an external advisor say a maximum of 1,900€ per month (about 2,100 USD) is possible. The bank also insisted on a 2% repayment rate during the meeting.
When they calculate, they say a loan amount of 400,000€ (about 440,000 USD) would be needed. But for that, here you basically only get a garden shed.
We can make compromises. However, I definitely will not go ahead with a project just to have built something and then not be happy.
The timing is simply bad. The bank asks why we didn’t decide one year ago. Unfortunately, that wasn’t our choice. Here, you won’t get plots from municipalities unless you have four or more children. And if you find something privately, prices range from 600 to 1,000€ per square meter (about 56 to 93 USD per square foot).
Considering daycare costs, welcome back to the South = quickly 450€ per month (about 490 USD).
We have time for the house construction; our main issue is just with the rental apartment—2 rooms and a child.
The bank offered 375,000 (approximately 414,000 USD) at 4.1% interest with 2% repayment, which comes to around 1,950 to 2,350€ per month (approximately 2,150 to 2,590 USD).
Both the bank and an external advisor say a maximum of 1,900€ per month (about 2,100 USD) is possible. The bank also insisted on a 2% repayment rate during the meeting.
When they calculate, they say a loan amount of 400,000€ (about 440,000 USD) would be needed. But for that, here you basically only get a garden shed.
We can make compromises. However, I definitely will not go ahead with a project just to have built something and then not be happy.
The timing is simply bad. The bank asks why we didn’t decide one year ago. Unfortunately, that wasn’t our choice. Here, you won’t get plots from municipalities unless you have four or more children. And if you find something privately, prices range from 600 to 1,000€ per square meter (about 56 to 93 USD per square foot).
Considering daycare costs, welcome back to the South = quickly 450€ per month (about 490 USD).
We have time for the house construction; our main issue is just with the rental apartment—2 rooms and a child.
S
Sunshine38710 Jan 2023 16:12Then just build a semi-detached house with 100m2 (1,076 sq ft) without a basement and garage for 320k plus 50k additional costs. If you don’t want that, you’ll have to consciously give up the dream of owning a house.
irmsche schrieb:
About 400€ z15 loan
At the bank appointment back then, 375,000€ with 4.1% interest and 2% repayment was about 1,950€ – 2,350€.
The bank and an external advisor say a maximum of 1,900€ is possible. The bank also insisted on 2% repayment during the discussion.
When they calculate, they say the loan amount would be 400,000 euros. But for that, you basically get a garden shed here.
We can make compromises. But I definitely won’t go ahead with a project just for the sake of building and then not being happy.
The timing is just bad. The bank then says, “Why not a year ago?” Well, unfortunately, we couldn’t choose. You don’t get plots from municipalities here unless you have four or more children. And if you find something privately, they ask for 600–1000€ per square meter.
Considering daycare costs—welcome back to the south—quickly about 450€ per month.
We have time for building the house; our problem is only with the rented two-room apartment and the child. Once again, my question: Why don’t you renovate? That would be much cheaper and not a problem with 400k. Have you at least considered this option with an appraiser?
leschaf schrieb:
Once again, my question: Why don’t you renovate? It would be much cheaper, and 400k is not an issue. Have you at least considered this with an expert’s assessment?The house cannot be renovated. We were aware of this; it was about the plot and the price for the land with the existing building was very reasonably low. The demolition is also inexpensive because we have connections.
But what else is there to say or advise here?
We have outlined all the adjustable factors available. You can either build smaller on your plot, build more affordably elsewhere, or simply choose not to build. There are no other options. Good advice can neither increase your income nor lower interest rates.
The issue with the condominium was thoroughly explained here as not recommended. Of course, there is always the risk that the perspective on the condominium matter is somewhat biased. After all, this is a house building forum, not a condo buying forum, and many participants tend to favor building.
We have outlined all the adjustable factors available. You can either build smaller on your plot, build more affordably elsewhere, or simply choose not to build. There are no other options. Good advice can neither increase your income nor lower interest rates.
The issue with the condominium was thoroughly explained here as not recommended. Of course, there is always the risk that the perspective on the condominium matter is somewhat biased. After all, this is a house building forum, not a condo buying forum, and many participants tend to favor building.