802k€ for house including additional purchase costs with 600k€ loan - Financeable?

Hello everyone,

an opportunity has arisen for us to purchase a semi-detached house in my home village from a private seller (about 35km south of Stuttgart). We have been waiting for 2 years (during which there were 3 opportunities, but prices were far beyond what was feasible).

General information about you:
We are Andreas & Melanie. Since especially everything related to "increasing money" is my hobby, I have a very detailed overview (e.g. household book for every € since 2018) of our finances. We can be described as "Swabian" when it comes to spending money (e.g. haven't paid for laundry detergent for years, there is always something free to test; annually changing electricity/gas/internet/insurance providers, etc.). For vacations/going out to celebrate, however, we do not watch the expenses in the same way. We are entering new territory here regarding financing a property – in fact, no one in our circle of friends has built or bought a house yet.

[*
Who are you?
[LIST]
[*]Andreas & Melanie, married since 2020


[*]How old are you?


[*]34 & 31


[*]Do you have children?


[*]None


[*]Are children planned?


[*]Definitely planning 1 child (2022, at the latest 2023; possibly a second child quite soon after that)


[*]What do you do professionally?


[*]Project manager & marketing manager


[*]Are you employed, self-employed, retired, housewife, househusband, etc.?


[*]Permanently employed, both university graduates


[*]How many hours do you work?


[*]Non-tariff (approx. 40h/week) & 37.5h/week

Income and asset situation:

[*
What income do you have (gross/net)?
[LIST]
[*]From work: Net (tax class 4/4): €2,800 & €2,000
[LIST]
[*]My wife also has fixed/yearly: 1.5 gross monthly salaries as Christmas bonus/vacation bonus
[*]I correspondingly dependent on evaluation: bonus of max. 2 gross monthly salaries


[*]The following are the averages from 2020 --> clearly increasing trend (December totaled €1,400 net, January €1,550, February approx. €1,900 expected)


[*]From dividends (net): €260/month
[*]From P2P loans (net): €188/month
[*]From stock options (net): €220/month
[*]TOTAL net: €660/month

[*

How much child benefit is there?


[*](still) None


[*]Other transfer payments such as parental allowance, sick pay, etc.?


[*]No


[*]How much equity do you have?


[*]approx. €210,000 (+ 2 paid-off cars, according to Mobile.de: Car 1 still approx. €25,000, Car 2 approx. €8,000 worth)
[LIST]
[*]of the €210,000 approx. €30,000 are kept in a "rainy day fund" on the savings account, the rest is invested


[*]Parents provide a total of about €130,000 for the house purchase

[*

How much equity do you want to invest in the house project?


[*]approx. €130,000 from parents + approx. €70,000 own equity = €200,000

Expense situation:
Housing costs:

[*
Current cold rent
[LIST]
[*]€559 (incl. water + additional costs; still living in the old student flat)


[*]Electricity


[*]€59


[*]Gas


[*]€54


[*]Telephone, internet, mobile, broadcasting fee


[*]€70

Mobility costs:

[*
Insurance
[LIST]
[*]€81/month for both cars


[*]Taxes


[*]€17/month for both cars


[*]Fuel


[*]€200/month for both cars


[*]Repairs & wear


[*]approx. €80/month for both cars


[*]TÜV & inspection for both cars


[*]€135/month

Insurance costs:

[*
Private health insurance (also supplementary insurance, daily sickness allowance, etc.)
[LIST]
[*]Parents pay


[*]Liability insurance (also for pets)


[*]€7.5/month


[*]Pension insurance (also Riester, Rürup, etc.)


[*]Both use a company pension plan – already considered in net salary
[LIST]
[*]She: €150/month
[*]Me: €100/month

[*

Other insurances (e.g. travel insurance, funeral expenses insurance)


[*]€10/month

Living expenses:

[*
Groceries + drugstore
[LIST]
[*]€220/month


[*]Restaurant & leisure


[*]€150/month


[*]Clothing


[*]€100/month


[*]Miscellaneous


[*]€200/month

Savings:

[*
Vacation
[LIST]
[*]€400/month


[*]Other


[*]€500 per month goes to the bank account
[*]All remaining money is invested

Total income and expenses:

[*
Total net income:
[LIST]
[*]Salaries: €4,800
[*]Dividends, etc.: €668 (Average of the last 6 months is €1,200/month net)
[LIST]
[*]Total: €5,468

[*

Total expenses


[*]€2,342 (the €500 that goes into the savings account is not included)


[*]Balance


[*]€3,162

General information about the property:

[*
How large is the plot?
[LIST]
[*]415m²


[*]What is the land value?


[*]550


[*]New build, old building (year built), house type?


[*]Semi-detached house, 1983


[*]Garages?


[*]1x garage
[*]1x parking space


[*]How large is the house? (living area / usable area)


[*]140.72 sqm
[LIST]
[*]Of which 29.11 sqm is a granny flat with separate access from outside, currently not rented out

[/LIST

Construction or purchase costs:


[*]Purchase price
[LIST]
[*]€750,000


[*]Incidental acquisition costs (notary, court, property transfer tax, broker)


[*]7% (Baden-Württemberg, no broker)


[*]Renovation and/or refurbishment costs


[*]Condition is "move-in ready" and currently still occupied by the owner & builder
[*]Instead of carpet in the bedrooms, it will be parquet (removing + laying we will do ourselves)
[*]Possibly new windows


[*]Total costs


[*]€802,500

Other costs:

[*
Kitchen costs
[LIST]
[*]We will keep the existing kitchen for now


[*]Furniture, lamps, decorations


[*]Budget of approx. €12,000 --> paid by the parents, therefore not relevant

Cost summary:

[*
Total costs
[LIST]
[*]€802,500


[*]Deductible equity


[*]€202,500


[*]Financing amount


[*]€600,000

Necessary loan details:
(for multiple components, please provide for all components; for multiple variants, please clearly distinguish):

So far we have not approached any provider and have first read up on what to consider

[*
Loan amount
[LIST]
[*]€600,000


[*]Loan type (e.g. annuity loan, bullet loan, etc.)


[*]Annuity loan

We have calculated a few things ourselves:

Monthly additional costs of the house: approx. €400 (chimney sweep, home insurance, household insurance, garbage, water/sewage, reserves €1/sqm/month, etc.)
Our balance then reduces to €2,762 (+ no longer needed rent of €559) = €3,321
Wife on parental leave (65% of net average) + child benefit are €481 less + additional costs of €200/month for the child. When the wife goes back to work, it will be 50% or 30h/week --> so approx. 65% of original salary will remain.
Our balance then reduces to €2,081 (+ no longer needed rent of €559) = €2,640

As of today, we would dare a monthly installment of absolutely at least €1,500 + "special repayments as much as possible" (considering what is more profitable at that time: repayment vs. investing)

What has not yet been evaluated here:

[*
Due to the move, I am entitled to a company car including a home office agreement for taxation of km
[LIST]
[*]Accordingly, approx. €25,000 will be "freed" by selling my car and monthly costs will cease.


[*]Promotion planned next year → net at least €300 more for me


[*]Possibly working elsewhere in the future, since salaries in the Stuttgart area are also different from the current place of residence – the same applies to my wife


[*]The house has a granny flat


[*]Accordingly, we plan 2 financings to be able to deduct interest, etc. for the rented granny flat
[*]Insurances/garbage, etc. can be partially charged to the tenant
[*]Comparable granny flats are rented for between €400-500
[LIST]
[*]€300/month is realistically assumed

[/LIST]
Information that the bank will not be interested in and that we absolutely do not want to factor or price ourselves (but which are "somehow" in the back of our minds and that we can be grateful for):
- My parents (retirees) will be bequeathing a medium- to high six-figure sum to me over the next decades, taking into account gifting rules
- Further support also comes from the parents-in-law (still 9 years until retirement), but to a much smaller extent (mid four-figure amount for contribution to special repayments)

So, that was a lot :)

We are particularly interested in your opinion on the installment and whether we might be overextending ourselves, too low, or have forgotten additional costs
- €1,500 per month (1% interest; 2% repayment assumed)
means paid off after 41 years without special repayment – no bank will accept that: more equity / higher rate?
With targeted €8,000 special repayment / year that means 26 years

Thanks
Melanie & Andreas

So we have comparable income but with around 500k the bank would have stopped lending to us. That's why I find 600k quite questionable with you. Dividend didn't really matter to us as income either. I don't know how banks generally view that.

I really don't understand in this context why you don't want to contribute 140k equity? We only kept about 10k as an emergency reserve for a broken washing machine or something similar under roughly comparable starting conditions.

You have already saved quite a bit and the parents are also adding a good amount. The income situation could be better for such a project. Under €3k for 40 hours in Austria does not sound ideal for the volume.

The bank will probably not count "the gambling" as income. It would be more reasonable, I think, to bring in more equity, but of course it is difficult to assess how secure and sustainable the income is/will be. P2P loans and the like also sound like high risk to me at first?!

Always cool, studying project management and then earning less net than a Daimler assembly line worker... Don't be angry but hopefully the bank won't give you 600,000 euros, especially since your wife will soon be out for a longer period.

Always cool, studies project management and then has less net income than a Daimler assembly line worker... Don't be mad, but hopefully the bank won't give you 600,000 euros, especially since your wife will be out for a longer time soon.

Always cool, these comparisons. What does the project manager who studied at Krauter or in the small company have to do with the overpaid (thanks to IGM) rubber door tapper at Daimler? That's such a typical corporate bigwig mentality. They with their fat 120k AT contract simply can't imagine what salaries outside the IGM Disneyland are reality, even in the AT sector.

By the way: If the project manager worked three shifts, he would probably also earn a few bucks more.

You should definitely remember this for the future, royalties, bonuses, holiday and Christmas bonuses are nice items that have to serve for special repayments or to cover unexpected expenses. Nothing more. You currently have a monthly income of €4800. One lives off that and pays the monthly installment, not from some annual averages.

€4800 without children sounds okay. Fictional €3800 with a child sounds bad given the size of the loan, right? What happens if your wife only works part-time or a second child comes along? You also don’t know what children cost.

Sorry, but no matter how frugal you are, €600k does not fit with your future income with a child.

EDIT: I don’t care what an assembly line worker earns. PLs are poor devils anyway. Pressure, stress, having to keep PM busy, but having no say. That would be the last job I would want to do permanently.