400k house financing - Who can take away my fear?

Hello everyone,

after having been an active reader here for quite some time, I finally want to find out whether we can/should afford such a small house.

Briefly about our (financial) situation:

[*]Net income he (32 years young): €4,000 - very secure job
[*]Net income she (34 years young): €1,200
[*]no children yet (but planned )
[*]Land already owned and paid for (value approx. €120,000 - rural Bavaria)
[*]additional equity to contribute: €100,000
[*]reserves for kitchen etc. available

Both salaries calculated conservatively, i.e. without holiday/Christmas bonuses and other bonuses.

Rough calculation of building project:

[*]City villa 170 sqm living space (at €2,000 each): €340,000
[*]Basement: €60,000
[*]Garage: €30,000
[*]Additional building costs: €50,000
[*]Outdoor facilities: €15,000 (just the essentials)
[*]Total: €495,000

Minus our equity, this results in a financing requirement of approx. €400,000. Thus, I would calculate a monthly burden of about €1,600.

These high financing sums are apparently normal here in Bavaria at the moment and can be driven up arbitrarily depending on the price per sqm for the land. Crazy world...

Back to the topic: I have been keeping a household budget for about 1 year and know that we can afford it - even with only one income (admittedly then the belt has to be tightened).

Nevertheless, these numbers overwhelm me a bit and I would like to know if there are forum members in a similar situation who might be able to take some of the fear away from me or of course also advise completely against the topic if I have approached it too naively.

I look forward to your answers!

I am in the same situation. Same salary (similar distribution) and the same loan amount (from Middle Franconia). However, already with 2 children where the older one is starting school and the younger one only costs one more year of kindergarten.

I cannot take away your fear (I have it myself ), but you have presented reasonable figures. The loan-to-value ratio is also completely fine. The fear simply lies in the required loan amount in connection with the salary distribution. With a salary distribution of 50:50 I would be totally relaxed , but unfortunately it is not like that.

I am 36 and want a house now and not in 3 years when I have 80k€ more. If construction costs and possibly interest rates rise, I also gain nothing from more equity.

Over how many years are you financing?

Hi,

the thing with the salary distribution is a tricky matter - nothing must happen to me. But that could be secured with [BU] + [Risikolebensversicherung]. My wife might then take even more care of my physical well-being...

I have already been to the bank with the numbers. My advisor said that the financing is not a problem at all. I would feel like he would have given me another 100k as well. But I just don’t trust those guys.

I would now plan to fix the interest rates for 20 years. However, I would still have a residual debt of 100k. I would try to pay this off as much as possible within the 20 years with special repayments.

The numbers really shock me. When I then think about possibly financing 2 children, who (worst case) might study forever, I start to sweat a bit. On top of that, there are also reserves for the house + cars etc. etc.

We are also aiming for a fixed interest period of 20 years.

At our place, the home financing will start at the end of the year, since we purchased the land at the beginning of the year (financed variably) and have paid off the ongoing costs by the end of December, we know our savings rate.

And without deceiving myself, I believe (based on the current savings rate) that a maximum special repayment of 20k€ is indeed possible without great effort. At least for the first 10 years.

And if it does not reach 20k€ per year, it must be 9k€ per year in order to finish within the fixed interest period.

Does it have to be 170m² + basement + double garage, or is it just because many people do that in Bavaria? Why not just go for a slightly smaller one and instead have it way more relaxed, especially since you already have worries? The fun is almost always going to be more expensive anyway, and I didn’t read anything about a buffer that could cover that.

Hi matte1987,

you really caught me there. Yes, I think the 170 sqm + basement + ... really came about because many people in my circle of acquaintances build like that. Following the motto: my house, my boat...

There would still be a buffer (this referred to the passage about reserves for kitchen etc.).

I know that there is still room for negotiation regarding the construction sum (less living space and/or no basement), but I just wanted to get a feeling from other builders whether the burden is not too high. It feels like nowadays everyone finances 400k and sometimes with worse equity and income conditions than we have.

For me it would be interesting to know whether I might be too cautious or if my circle of acquaintances is financing down to the last cent?!

Best regards