Always keep an eye on construction costs
Who dreams of owning a home? should be careful to keep an eye on the construction costs even before planning is started and throughout the process. In addition to the pure costs of building a house, additional costs such as notary fees, provision rates, land transfer tax and brokerage fees must be considered. This guidebook tells you what additional costs you should plan and how you can always keep track of your construction costs.
Checklist: How to Keep Track of Construction Costs
The following checklist is a first indication that How to get an overview of the total construction costs:
- Use the building cost calculator on the Internet
- They provide important first clues
- However, often only standard conditions are used for the calculation
- Calculate prudently and realistically
- Use the DIN standard 276 for determining the construction costs
- Here, all individual items are displayed clearly
- Do not just think about the purchase price, but also the additional costs such as:
- Broker, Notary and Land Registry Fee
- Property Transfer Tax
- Fees for Permits or Land Registry Excerpts
- Financing costs such as discounts, fees and interest
- Archite ktenhonorar
- The additional costs are equivalent to about 10 percent of the total expenditure
- Additional costs often arise for the construction of gas, electricity, district heating, water and telecommunications lines and sewers
Only if you plan all costs from the beginning and keep an eye on the construction costs during the entire construction phase.
At least 20 percent equity should be
A long-term financing plan is the cornerstone of your home. First, you should list all regular earnings and expenses. In this way, it is easiest to determine how much money you have left at the end of the month for the financing rates. Equity plays an important role in any financing.
Experts recommend equity of 20 percent of the total construction costs. In principle, however, the more equity you have, the better the conditions for the loan.
The interest rate only has to be slightly lower, so that you can save several thousand euros over the term of the financing.
A comparison of the Offers worthwhile
As soon as you have determined your financial scope, you should ask several banks for offers for the loan. It is important to carefully compare conditions such as initial repayment, rate fix, interest rate and provisioning rate to avoid unpleasant surprises. Always reckon on your own to find home financing that best suits your needs. At the notary's date, the construction contract is signed and the land register entry created. At the latest then you should have a binding loan commitment from your bank.
The loan agreement should be concluded after the notary's appointment. If the agreed loan is not used, the bank may charge you a non-acceptance fee.
The notary's expenses are around one percent of the construction cost. If the construction sum is 200,000 euros, you should therefore allow 2,000 euros for the notary. A few weeks after the signing of the contract, the real estate transfer tax, which depends on the purchase price of the undeveloped property, accrues. Depending on the federal state, it amounts to between 3.5 and 5 percent.
In addition to the pure purchase price, additional additional costs must be budgeted. These include the fees for the notary, the broker and the entry in the land register and the land transfer tax. It is important to keep an eye on the construction costs in order to avoid unexpected high additional payments.
Product Image: © Ekachai Lohacamonchai / Bigstock.com