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
Have you already contacted general contractors (GCs) in the more affordable segment (I’m thinking of companies like Danwood or Town & Country) to get quotes, just to better estimate the price range for the house?
Do you get better loan conditions if you partially use the grandparents’ property as collateral—would that be an option?
Is the existing building definitely not suitable for renovation?
Otherwise, maybe start with a smaller build and include space for future expansion. Small children don’t need their own room for quite a while, and later on, you can manage well with less space (for example, check out Danish floor plans, where children’s rooms are planned at around 8m2 (86 sq ft)).
Do you get better loan conditions if you partially use the grandparents’ property as collateral—would that be an option?
Is the existing building definitely not suitable for renovation?
Otherwise, maybe start with a smaller build and include space for future expansion. Small children don’t need their own room for quite a while, and later on, you can manage well with less space (for example, check out Danish floor plans, where children’s rooms are planned at around 8m2 (86 sq ft)).
So, when we were planning in October,
we stated a net income of 5,500 plus child benefits.
Loan offers ranged from 3.45% to 4.7% for a loan of 422,000.
Monthly payments between 1,900 and 2,400 were possible.
Since then, my wife’s and my income plus child benefits have increased somewhat.
(we have only purchased one house and are now soon moving in)
we stated a net income of 5,500 plus child benefits.
Loan offers ranged from 3.45% to 4.7% for a loan of 422,000.
Monthly payments between 1,900 and 2,400 were possible.
Since then, my wife’s and my income plus child benefits have increased somewhat.
(we have only purchased one house and are now soon moving in)
S
Sunshine3879 Jan 2023 22:58Wo1z3rl schrieb:
Would you get better loan conditions if you perhaps partially mortgage your grandparents’ property? Could that be an option? That is probably the most outrageous thing I have read in a long time! Involving the grandparents as co-signers for your own financial benefit, risking that you all could suffer together in the worst case of job loss (meaning: forced sale of the grandparents’ house). I would never even consider mortgaging my grandparents’ home or having them compromise their secure financial situation just so I can get a better loan. Whoever suggests something like this is more than inconsiderate and selfish. After all, the grandparents worked many years to pay off their debt-free home. To even think about endangering that, along with the partner’s job, is absolutely unacceptable.
irmsche schrieb:
salary I 3000 net
salary wife 2300 netOk, good... in that case, you really have to calculate very carefully. Additionally, there is child benefit. I would also be interested to know if this is already calculated as part-time or not. Childcare costs (daycare or childminder) also play a big role. Some regions are outrageously expensive, while others charge nothing or only for meals. Is there a 13th salary or bonuses? 0, 1 or 2 cars? All of this matters.Without details, you can also simplify it down to current net rent + current savings rate - €200 (about $220) higher additional costs equals the maximum loan payment that is possible.
Part-time work is very important to consider, parental leave personally doesn’t matter much to me since you can use a few thousand euros of savings for that.
What did the bank say about the maximum amount they would be willing to finance for you?
And here we often talk about a potential inheritance: when and how much can you expect? And how certain is that inheritance?
M
Marvinius10 Jan 2023 00:46Tassimat schrieb:
Okay, well... you really have to be very precise with your calculations. On top of that, there’s child benefits. I’d also be interested to know if the income is calculated based on part-time work or not. Childcare costs (daycare or nanny) are also a major factor. Some regions are outrageously expensive, while in others it’s free or just covers meals. Is there a 13th salary or bonuses? 0, 1, or 2 cars? All of that plays a role.
Without details, you can simplify it to current cold rent plus current savings rate minus €200 (about $220) higher additional costs equals the maximum mortgage payment possible. Part-time work is very important to consider; parental leave wouldn’t matter much to me personally, since you could use a few thousand euros of your savings for that.
What did the bank say regarding the maximum amount they would finance for you?
And we’re talking a lot here about a potential inheritance: When can you expect it, and how much? And how certain is the inheritance?The bank usually doesn’t grant more than ten times the net annual income as the maximum loan. If only one income remains, that would be a €300,000 (about $330,000) loan plus equity.