Hello dear forum users,
I am new here and have spent the last few days reading a lot in the forum. It’s great that so many of you share your experiences and also bring all the negative aspects of building to light. This has helped me to take off my rose-colored glasses a bit and to think more realistically about the idea of building.
A brief overview of our situation: we are a household of three.
Our dream is to have our own home. Due to the current interest rates, we would like to carry out our plan and build now.
Here are the key details:
I hope that even when I share these, some of you will continue reading and give us a bit of encouragement that we can realize our dream. We have found a plot of land for 55,000€ (about 55,000 euros). Our total budget is 250,000€ (about 250,000 euros).
That leaves 195,000€ (about 195,000 euros) for the house.
With that, we want to cover everything. By everything, I mean a turnkey house including additional building costs, etc.
The only extras would be flooring and wallpaper. Everything else should be included within that.
Our plan is for about 135 sqm (1450 sq ft) with 5 rooms.
We haven’t arranged financing yet, as this forum marks the first steps in that direction. We don’t have any equity. According to our credit rating, I would say we are well positioned. I think we can afford a monthly payment of 900€ (about 900 euros) if we also budget 250€ (about 250 euros) for operating costs. This assumes 1% repayment rate. We plan to increase that to 2% after 5 years.
1.) My first question to you is: Is our budget too tight for building? Can we actually afford to build? Or should we rather look for an older used house?
2.) Is financing completely without equity even possible? Will the bank agree to that? Are additional costs such as extra building-related fees and the building materials financed as well?
Thank you very much for all your answers! I’m really curious and hope our dream won’t completely fall apart. Thank you!!!
I am new here and have spent the last few days reading a lot in the forum. It’s great that so many of you share your experiences and also bring all the negative aspects of building to light. This has helped me to take off my rose-colored glasses a bit and to think more realistically about the idea of building.
A brief overview of our situation: we are a household of three.
Our dream is to have our own home. Due to the current interest rates, we would like to carry out our plan and build now.
Here are the key details:
I hope that even when I share these, some of you will continue reading and give us a bit of encouragement that we can realize our dream. We have found a plot of land for 55,000€ (about 55,000 euros). Our total budget is 250,000€ (about 250,000 euros).
That leaves 195,000€ (about 195,000 euros) for the house.
With that, we want to cover everything. By everything, I mean a turnkey house including additional building costs, etc.
The only extras would be flooring and wallpaper. Everything else should be included within that.
Our plan is for about 135 sqm (1450 sq ft) with 5 rooms.
We haven’t arranged financing yet, as this forum marks the first steps in that direction. We don’t have any equity. According to our credit rating, I would say we are well positioned. I think we can afford a monthly payment of 900€ (about 900 euros) if we also budget 250€ (about 250 euros) for operating costs. This assumes 1% repayment rate. We plan to increase that to 2% after 5 years.
1.) My first question to you is: Is our budget too tight for building? Can we actually afford to build? Or should we rather look for an older used house?
2.) Is financing completely without equity even possible? Will the bank agree to that? Are additional costs such as extra building-related fees and the building materials financed as well?
Thank you very much for all your answers! I’m really curious and hope our dream won’t completely fall apart. Thank you!!!
schubert7927 Dec 2012 16:07Hmm. With a 1.00% repayment rate, you will be paying for 40 years or more. Your budget is, in my opinion, set too low. You also have to pay property transfer taxes, notary fees, and so on. Take a look at the overview of additional costs from Bauexperte. And the bank will, of course, ask: ...why haven’t you saved any equity so far? Especially if a 900 EUR (about 965 USD) monthly installment would be possible...
X
Xtreme100027 Dec 2012 22:21The budget is really tight. This can work out, but it can also go badly wrong. Our budget is only €270,000. For that, the key factors have to fit. It’s very important to consider what additional costs might come up with the land. We have a family member who is an earthworks contractor and took care of everything. We had to add over one meter (3 feet) of fill. That came at a special family price. Then we chose a small house, with 118 square meters (1,270 square feet) of living space. That is enough for us. I am very strict about budget limits and so far we have not exceeded any planned items. Everything is working out very well up to now. We had the advantage of planning with the company for six months without signing anything. That means we were able to finalize almost everything—from plumbing to electrical, doors, windows, and so on—before signing the contract. This creates more certainty. I am a bit more cautious about your monthly budget than some of the previous commenters. I think you should aim for repayments of around €1,100 (about $1,200) per month. As you can see, it’s quite complex. Building a house on a small budget is possible, but it requires thorough planning and careful calculations.
Hello,
kitchen, fixtures, notary (land registry, etc.), and real estate agent fees are not covered by financing. So all of this must be paid out of pocket.
100% financing almost only works for civil servants. But just ask your bank and make an appointment. Then you will know more.
Good luck!
kitchen, fixtures, notary (land registry, etc.), and real estate agent fees are not covered by financing. So all of this must be paid out of pocket.
100% financing almost only works for civil servants. But just ask your bank and make an appointment. Then you will know more.
Good luck!
1150 is the total monthly budget including everything.
With 195,000 without equity, you won’t get below 4%, which with 1% repayment (which is far from healthy) equals 9,750 euros annually, so 812.50 euros monthly.
Whatever the house actually costs... can we manage with 1150 euros?
BUT: without equity, 1% repayment at low interest rates. NO WAY.
The term is somewhere around 40 years... if the interest rate, and I assume a 10-year fixed period, increases at refinancing – which is likely – then good luck.
Almost nothing is paid off then, about 10% of the loan amount, and the refinancing will be expensive.
Let’s say the remaining debt is 175,000 and interest is at the average of the last 10 years, around 6%, then the cost (again with 1% repayment) would be:
1,021 euros plus applicable additional costs, let’s say 400 euros... 1,421 euros.
That will become a problem... especially with temporary unemployment or a child.
With today’s interest rates, I wouldn’t consider any financing below at least 2% repayment.
From day one. Extra repayments on top.
With 195,000 without equity, you won’t get below 4%, which with 1% repayment (which is far from healthy) equals 9,750 euros annually, so 812.50 euros monthly.
Whatever the house actually costs... can we manage with 1150 euros?
BUT: without equity, 1% repayment at low interest rates. NO WAY.
The term is somewhere around 40 years... if the interest rate, and I assume a 10-year fixed period, increases at refinancing – which is likely – then good luck.
Almost nothing is paid off then, about 10% of the loan amount, and the refinancing will be expensive.
Let’s say the remaining debt is 175,000 and interest is at the average of the last 10 years, around 6%, then the cost (again with 1% repayment) would be:
1,021 euros plus applicable additional costs, let’s say 400 euros... 1,421 euros.
That will become a problem... especially with temporary unemployment or a child.
With today’s interest rates, I wouldn’t consider any financing below at least 2% repayment.
From day one. Extra repayments on top.
M
mcarstensen20 Jan 2013 22:31I can only agree with the previous speakers regarding repayment and related matters. However, concerning the total costs, it might be helpful to know where he plans to build. Differences need to be taken into account here. And what type of house it is.
In Schleswig-Holstein, for example, it should definitely be possible to build a house for 250,000 EUR (approximately 270,000 USD).
In Schleswig-Holstein, for example, it should definitely be possible to build a house for 250,000 EUR (approximately 270,000 USD).