Affording a house? Not from the bank's perspective but realistically

  • Erstellt am 2012-12-10 12:20:45

Crogxil

2012-12-10 12:20:45
  • #1
Hello everyone,

we are pondering and despairing. Can we afford a house? Whether new build or used.

We are currently in the child planning phase. Our net income at the moment with one child will be 2890 plus 184 child benefit, so just under 3074 euros. That is what we will have when my wife goes back to work at 50% after one year – before that a bit more. I will also soon earn a bit more. So this is just a starting budget.

Somehow the costs are eating us up. I have broken it down exactly so you can get a better overview.

Now I have calculated the following:



















































Additional costs 415.00 €
(Heating 100.00 €, Electricity 100.00 €, Water 30.00 €, Sewage 30.00 €, Property tax 25.00 €, Trash 20.00 €, Insurance 25.00 €, Maintenance 20.00 €, House reserves 50.00 €, Firewood 15.00 €)
Household money: 700 €
(Food, personal care products, household supplies for 2 adults + child)
Savings 150 €
Kindergarten 180 €
Phone 50 €
Cell phones 17€
Fuel 250 €
Private pension insurances 122 €
Disability insurance 50€
Car insurance for 2 cars 65€
Car loan 100 €
Dog & cat food / vet insurance / 100 €
Dental supplementary insurance for 2 persons 32€
Car tax for 2 cars per month 45 €
Liability insurance 7€
Parents’ pocket money 150€ (sometimes going out to eat, clothes, sometimes treating ourselves, hairdresser and co)


Total: 2433€ – leaves 641€ for repayment.

Ok, in 1.5 years I will get 200€ more net – so a repayment of 841€ is possible. That is all very tight, isn’t it?

Well, we still have a buffer of about 200 euros per month. (Christmas bonus, vacation pay, etc.) But I don’t want to factor that in. Equity is about 15,000 euros available.

We don’t earn that badly and don’t have that many extras now. Can a normal earner not afford a house today? How do you do it?
 

Musketier

2012-12-10 18:01:37
  • #2
Through


the point


should be somewhat relieved. My female colleagues also sometimes order children’s döner.

Now seriously, I think 700€ household money is quite a lot.

Our weekly shopping for 2 people is usually under 50€ = 200€/month. Plus the canteen 2*4€*20 days = 160€.
Usually, we cook a bit more on weekends, so that 1-2 times/week the canteen is not needed.
If I calculate the 360€ for 3 people, that is 540€. Since larger packages usually cost less, it should be cheaper for 3 people. I think we get by with 300-320€/month for 2 people.

The cars, on the other hand, are set too low. Repair/depreciation/tires are missing. Especially since you seem to use the car quite intensively. I once saw somewhere (probably ADAC) what a car roughly costs. A mid-sized car costs 400€ with everything included. Small cars about 300€. For used cars, it is probably somewhat cheaper. What is really underestimated is the repair effort and depreciation.

We both earn money, so we have taken out occupational disability insurance (90€/month total) and life insurance (for 31€/month) for both of us.

50€ reserves for the house will not get you far.

Is a dog really that expensive or do you have so many animals?
The cat food for one cat is already included in our weekly shopping and probably costs about 10-12€/month. Vet about another 10-15€/month.

Vacation should maybe also be possible now and then.

The equity of 15K€ is rather modest. What was your cold rent so far?

I think you should still wait, try to save as much as possible, and when you earn more, then you can think about a house. In the meantime, contracts can be optimized and unnecessary subscriptions canceled. Until then, you will have enough time to go to fairs, read in forums, etc.
If you can perhaps do without a car by buying/building a house, the calculation could look completely different.

In any case, do not make the mistake of looking at the brochures and thinking you can build a house with 130K€ plus land.
That definitely does not work.
 

Curly

2012-12-10 22:04:52
  • #3
Hello,

700 euros for household expenses would be too little for us. In your overview, I don’t see any expenses for the child (clothes, diapers, school costs, shoes!!!, cinema, zoo visits, furniture, toys, braces (very expensive), hairdresser, class trips (just cost me over 600 euros for 1 child), etc. Children cost a lot of money. I would wait with the house construction until children are there and save more equity. 15000 euros is practically nothing; from that you can lay out your front garden and pave the driveway. You will also definitely need money to buy a new car sometime.

Best regards Sabine
 

Crogxil

2012-12-11 10:35:15
  • #4
Hello,

first of all, thank you for the answers. The numbers are current facts, not estimates. Only the household money and the kindergarten are estimated. I simply took our current household money times 2 times 3.

When the child is in school, there will be no more 180 euros for kindergarten. A large part of the money can then be used for the "child-related costs." In 6 years my income will also be higher. I am just at the starting point of my career.

We have saved 8,000 euros in 2 years now. But we spent a good 12,000 euros in that time on vacations and purchases. At the moment we can save a good 800 euros per month.

Since my wife now wants to have a child (topic biological clock), we have to build/buy now and cannot wait 3-4 years. The current home offers no possibility for a children's room - so we have to move.

I think that once the child is there and my wife works only 50%, saving will not be easier, therefore the current time.
 

Curly

2012-12-11 11:27:39
  • #5
With a monthly payment of 850 euros, you can pay off about 200,000 euros in credit (in 30 years). You won't get a new build for that, maybe there is something used for you, it also depends on your place of residence and whether you can do a lot of renovation yourself.

Best regards Sabine
 

Der Da

2012-12-11 14:04:55
  • #6
I would say, if you want to continue living like this, you can’t afford a house with the basic costs. You can already put your equity aside. In my opinion, you shouldn’t even declare it to the bank yet, because they demand that it be used. If you suddenly need more money over time, you will have to refinance at a high cost.
In the end, the money is gone, or it’s only enough for a small kitchen or a new dining table.

You can see for yourself that saving later becomes harder, that’s why paying it off should work. If you don’t have a plot yet, and depending on what the sqm costs where you live, you need between 50,000 and 150,000 for the land, then at least another 200,000 to 250,000 for the house without a basement. And that will be a small house without extras.
If you read around here in the forum, you will see many prices for construction projects. I can only report from ours.
230,000 for the house, 42,000 incidental construction costs + land. The house has KFW 55 and about 150 sqm of living space, no basement, and garage or exterior landscaping are not yet considered here.

How do you want to raise at least €300,000 with a rate of €900? Even if that would work, you would just be paying the interest in 20 years and the remaining debt would still be extremely high.

You asked how others do it: Either people sign pointless loan agreements and will have to say goodbye to their home in 10 years if the interest rate rises by 5%, or they simply earn more, or the family has provided the necessary equity.

First of all, you should try to reduce your expenses. Especially having two cars is not very helpful, especially if they are not yet paid off and possibly still have high final installments pending. Then, if I see it correctly, you currently live in a 2-room apartment, which means you should look for a cheap 3-room apartment and save for a few years first.
Now comes the child problem: A child costs a ton of money, and usually the child benefit is not enough for that. My son is now 7 weeks old, and all the clothes we bought for his birth are now too small. That means buying new ones. If you’re lucky like us, you have relatives who can give you the basics like stroller, car seat, changing table, and so on... If not, the baby industry will dig into your pocket. When I add up everything we would have had to pay, it would have been a clear 4-digit amount, probably even with a 2 in front. If your wife can breastfeed, everything’s okay, but if you rely on formula, it gets expensive again. Not every baby accepts the cheap stuff, and a little one has to eat every 2 hours. A €15 pack is gone quickly.
It all adds up, and the €180 you get as child benefit is by no means enough.
You only get tax advantages if you earn a lot, so don’t count on it; the numbers are sobering.
Now your wife goes back to work after 1 year and earns say €1,000 net. Then your petrol costs rise again, maybe expenses for canteen meals, and then the kicker: the daycare or nanny. In your post you write €180... I would say that’s your desired amount. Because here in Karlsruhe a daycare place costs at least €300 and there is no upper limit. Provided you get one at all.
This is already the most important point:

Plan so that it definitely works with your salary. No one can guarantee that your wife will be able to go back to work. What if your child, God forbid, is say, more in need of care and not suitable for daycare? What if your wife’s employer fires her shortly after she returns because she might have to stay at home with the little one too often?

That’s surely pessimistic, but what do you get from a house that becomes a burden or the bank takes away? Regardless of whether it’s a prefab house or not, building a house takes a lot of time and nerves. And personally: do one thing after the other. Our little one came 4 weeks before the house... it’s no fun to try to do both at the same time. If you don’t even get a vacation then, you’ll break down. I thought it would be easier to get a prefab house, but there was more to do than expected at the beginning. And mistakes usually have expensive consequences.

So bottom line, after a long text: try to cut expenses, try to save more, and talk to your family. Maybe there’s some financial support there. After that, go to a financial professional.
 

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