Hello home builders,
We (27 and 28) are considering building a single-family house. We originally wanted a new condominium, but realistically, that’s not an option due to prices in the city and our “pet problem” (location, layout, price, limited to the ground floor). Then, through a private offer, we came across a plot of land in a sought-after new development area (not in the city) and started thinking about it.
Of course, we feel like this is a bit overwhelming — I have been in my job for two years, and my partner a bit longer.
Our financing plan would look like this:
House €230,000 + land €50,000 + earthworks, slope stabilization, and additional costs €60,000 = at least €350,000
Current equity combined €120,000, we want to keep a €20,000 buffer, so €100,000
Loan of €250,000 with various terms (KfW, annuity loan, and a home savings contract loan which can run up to 20 years if necessary). My partner also has two ongoing home savings contracts that will bring in another €100,000 in 10 years and could be used for repayment.
Current combined income is about €5,200, both full-time, with contractual salary increases. Currently, each of us saves €1,500 per month plus €500 rent.
It actually sounds like something we could manage. Especially with the low interest rates tempting us, and at some point we want a house, that’s clear.
Point #1: Children — we currently earn almost equal amounts, so I really can’t afford to take a long leave. How have you dealt with that? Do you calculate only with one income? With the 10% special repayment option, you can pay quite a bit extra towards the monthly rate.
Point #2: What happens if we separate? My partner would have to carry the house alone. Have you contractually fixed such contingencies in advance?
Point #3: Does it make sense to design the floor plan so rooms can be partitioned later, which we don’t need right now? Or is that disproportionately expensive?
Thank you for any kind of responses and ideas!
We (27 and 28) are considering building a single-family house. We originally wanted a new condominium, but realistically, that’s not an option due to prices in the city and our “pet problem” (location, layout, price, limited to the ground floor). Then, through a private offer, we came across a plot of land in a sought-after new development area (not in the city) and started thinking about it.
Of course, we feel like this is a bit overwhelming — I have been in my job for two years, and my partner a bit longer.
Our financing plan would look like this:
House €230,000 + land €50,000 + earthworks, slope stabilization, and additional costs €60,000 = at least €350,000
Current equity combined €120,000, we want to keep a €20,000 buffer, so €100,000
Loan of €250,000 with various terms (KfW, annuity loan, and a home savings contract loan which can run up to 20 years if necessary). My partner also has two ongoing home savings contracts that will bring in another €100,000 in 10 years and could be used for repayment.
Current combined income is about €5,200, both full-time, with contractual salary increases. Currently, each of us saves €1,500 per month plus €500 rent.
It actually sounds like something we could manage. Especially with the low interest rates tempting us, and at some point we want a house, that’s clear.
Point #1: Children — we currently earn almost equal amounts, so I really can’t afford to take a long leave. How have you dealt with that? Do you calculate only with one income? With the 10% special repayment option, you can pay quite a bit extra towards the monthly rate.
Point #2: What happens if we separate? My partner would have to carry the house alone. Have you contractually fixed such contingencies in advance?
Point #3: Does it make sense to design the floor plan so rooms can be partitioned later, which we don’t need right now? Or is that disproportionately expensive?
Thank you for any kind of responses and ideas!
We are in a similar situation. We are almost 28 and 30 years old (which I honestly don’t consider very young anymore), and our house is nearly finished. We are married and already have two children (2 years and 7 months old). Our income is about the same as yours, and our equity was also similar at the start of construction. I would do it the same way again. You never have any guarantees. As an unmarried couple, you should clearly agree on how to handle a possible separation in a contract. But otherwise, why wait? What’s going to change in five years?
1. Always plan financing based on only one income. It’s possible that one income might temporarily stop, and with the money saved from the other, you can cover extra repayments, as well as contributions to the building savings contract.
2. If the financing was calculated based on just one income, then in case of a separation, your partner could realistically manage the house payments alone. But I would still recommend formalizing this in a contract.
3. I don’t really see the point in waiting, but I guess that’s a matter of personal preference. Do you want to start another construction project in five years? I definitely don’t!
1. Always plan financing based on only one income. It’s possible that one income might temporarily stop, and with the money saved from the other, you can cover extra repayments, as well as contributions to the building savings contract.
2. If the financing was calculated based on just one income, then in case of a separation, your partner could realistically manage the house payments alone. But I would still recommend formalizing this in a contract.
3. I don’t really see the point in waiting, but I guess that’s a matter of personal preference. Do you want to start another construction project in five years? I definitely don’t!
milkie schrieb:
May I ask why not? We are currently building with three children. It’s absolutely no problem. The kids are really interested in the construction site, the machinery, and so on. We know exactly how much space we need. If we had built before having children, we probably would have regretted it afterward. Just like we are now doing in the rented townhouse.Of course, it also depends on the children’s ages. My comment referred more to children between 0 and 3 years old. However, I plan to do a lot of the work myself, and it wouldn’t be ideal to have to constantly keep an eye on the kids as well. After all, it’s a construction site where many things can happen.
As expected, many different opinions.
I’m not sure that after waiting 5 years you necessarily have more security (through job, marriage, or children).
We had actually planned to split the terms into 10 and 20 years, or have one loan with a flexible option (fixed at 1.25% for 10 years, then 2.25% from year 11 to 20). We definitely want to use the KfW loan of 50,000 for 10 years at 1.0%. If we lock in such a long fixed period (> 20 years) now, it significantly impacts the interest rate.
According to the calculation, one income would be enough to manage repayment within 20 years.
With both loan offers (Sparda and Schwäbisch Hall), as far as I know, you can adjust the installment twice during the term free of charge.
Yes, the home savings contracts are actually cheaper than the bank loan.
We also had another approach in mind from the start:
We are building 150m2 (approximately 1,615 sq ft), but divided into two apartments of 70-75m2 (approximately 750-810 sq ft) each, minus the heating room. One apartment would be rented out, and we would live in the other. The rental income would give the option that my partner could finance everything alone (but doesn’t have to).
This setup would offer flexibility in case we want to move out of the house again, even just for 5 years to accept an attractive job offer. In the event of a separation, my partner could rent out both apartments if necessary.
If everything goes as planned, after 5–7 years we would need to renovate again (to fully adapt the house for family life with children). Then the rental income would probably just break even. Or, if financially better off, rebuild entirely.
I also wonder whether such a property would be a sensible investment (around 15km (9 miles) from a city of 100,000 inhabitants), since due to demographic change, only city apartments are really in demand.
And you would have tenants in the house.. :/
I’m not sure that after waiting 5 years you necessarily have more security (through job, marriage, or children).
Doc.Schnaggls schrieb:
Since you are both still relatively young, I would recommend a relatively long fixed interest period of 25 to 30 years with a moderate repayment rate (2% initial repayment) combined with the option for special repayments (for the part that is not redeemed with the home savings contract). That way, you can, but don’t have to, repay significantly.
I would also suggest including the possibility in the contract to adjust the repayment rate two to three times without fees.
Have you checked whether your friend’s home savings contracts are really cheaper than current bank loans?
We had actually planned to split the terms into 10 and 20 years, or have one loan with a flexible option (fixed at 1.25% for 10 years, then 2.25% from year 11 to 20). We definitely want to use the KfW loan of 50,000 for 10 years at 1.0%. If we lock in such a long fixed period (> 20 years) now, it significantly impacts the interest rate.
According to the calculation, one income would be enough to manage repayment within 20 years.
With both loan offers (Sparda and Schwäbisch Hall), as far as I know, you can adjust the installment twice during the term free of charge.
Yes, the home savings contracts are actually cheaper than the bank loan.
We also had another approach in mind from the start:
We are building 150m2 (approximately 1,615 sq ft), but divided into two apartments of 70-75m2 (approximately 750-810 sq ft) each, minus the heating room. One apartment would be rented out, and we would live in the other. The rental income would give the option that my partner could finance everything alone (but doesn’t have to).
This setup would offer flexibility in case we want to move out of the house again, even just for 5 years to accept an attractive job offer. In the event of a separation, my partner could rent out both apartments if necessary.
If everything goes as planned, after 5–7 years we would need to renovate again (to fully adapt the house for family life with children). Then the rental income would probably just break even. Or, if financially better off, rebuild entirely.
I also wonder whether such a property would be a sensible investment (around 15km (9 miles) from a city of 100,000 inhabitants), since due to demographic change, only city apartments are really in demand.
And you would have tenants in the house.. :/
Hello again everyone,
We have made some progress by now. Since our plot is quite sloped, the planning is naturally a bit more challenging compared to a flat site.
At the moment, we are undecided between a regional or national solid house builder and an architect.
Would you only build with an architect on a slope? The architect has already given us some good advice, which we are now trying to implement with our solid house builder.
The plan is to place the ground floor against the hillside, so that three sides have windows and the back side is against the earth. We would not put the living area in this floor, but rather the bedrooms, bathroom, and utility room. On the upper floor, we want to have direct access to the hillside level (terrace), with the view facing the valley side. This floor is intended to include a nice living area, an office, and a bathroom. Both floors will be about 75m2 (800 sq ft) each and full stories (city villa or flat roof, we have not quite decided yet).
We have made some progress by now. Since our plot is quite sloped, the planning is naturally a bit more challenging compared to a flat site.
At the moment, we are undecided between a regional or national solid house builder and an architect.
Would you only build with an architect on a slope? The architect has already given us some good advice, which we are now trying to implement with our solid house builder.
The plan is to place the ground floor against the hillside, so that three sides have windows and the back side is against the earth. We would not put the living area in this floor, but rather the bedrooms, bathroom, and utility room. On the upper floor, we want to have direct access to the hillside level (terrace), with the view facing the valley side. This floor is intended to include a nice living area, an office, and a bathroom. Both floors will be about 75m2 (800 sq ft) each and full stories (city villa or flat roof, we have not quite decided yet).
Kisska86 schrieb:
But I’m sure the solid construction company also employs an architect or similar, and they can provide good ideas as well.Unfortunately, only the somewhat higher-priced providers have architects skilled enough to create a successful custom design.
Usually, a "standard" detached house is just slightly modified, so the house doesn’t fit the site but is rather forced onto it.
Providers at the higher end don’t hesitate to pay the architect’s fee.
Therefore, I would choose an architect with experience in building on slopes.
Best regards, Yvonne
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