Assessment of financing scope with 4620 euros net

I just crunched the numbers again briefly.

So let's assume you could manage with 650k €. 240k for the land. 410k for the house, now without a basement and calculated optimistically. You have no equity, the 20k will probably be used up for the kitchen and additional costs, which won't even be enough.

Let's calculate with an average age of 35 and say there are about 30 years left until retirement.
You have 4620€ net. I’m now calculating with such flat rates, for simplicity - the rule of thumb says that up to 30% of income for the mortgage payment is still okay. That would come to 1386€. Let’s generously round that up to a 1500€ payment.

With that, assuming a fictitious interest rate of 1.8% and a term of 15 years, I come to an outstanding balance of 541.6k €. That’s a lot of debt, 15 years before retirement.
I also see the following problem: Would you even get 1.8%, or would the conditions not be even worse with such a high loan amount and no equity? Or rather: Would you even get financing at all?

Scenario 2, let's say you could manage a 2000€ payment.
With that, still at 1.8% interest rate, the outstanding balance after 15 years would be 438k €.

No matter how you look at it, it just won’t work out that easily.

That’s what I mean...

The income in connection with the low equity and the relatively short time until retirement... All of this ends in total chaos.

Then there are children involved - which means the monthly repayment of 2,000-2,500€ is impossible.

This is the textbook example of: It will end in ruin.

Something like this actually shouldn’t be financed by the bank... But unfortunately, it still happens.

Only proper, flexible children's shoes cost a lot of money. Or a [Walkanzug]. Used ones are hardly any cheaper than new.

Something like that really shouldn't be financed by the bank... But unfortunately it still happens.

In this case, I can actually imagine that it wouldn't be possible to arrange any financing for that. Banks aren't allowed to take every risk anymore. I can well imagine that it's "not feasible" for the banks, although I'm not a banker either.

Phew, very exciting thread. Personally, I don’t think your plan is feasible. The income doesn’t match the financing you’re facing, in my opinion. Plan much smaller – does it have to be a basement or even a new house at all? What about a used condominium? Your household budget doesn’t add up. Try keeping a household ledger to get a realistic impression of your expenses.

Regardless, I have to state the following:

Your 20,000 euros of equity won’t be used for the kitchen, furniture, etc., that money will already be spent on the notary, property transfer tax, and registration of the mortgage.

Even if you have 20,000 euros left for the kitchen, furniture, etc., after moving into our own home I have to say: That money is spent faster than you can look and will never be enough for these items. You will have so many small individual items that add up in total. I’m thinking of skirting boards, lamps, wall paint, wallpaper, food for construction and moving helpers, light bulbs, and small things like toilet seats and fly screens.

Do the following:

Assume you have to pay a monthly installment of 1,600 euros for the financing. Now calculate this installment minus your current cold rent plus 200 euros additional monthly costs for the house and just try to set aside this amount every month over a longer period without fail. If that works, you already have significantly more equity and can dare to take on the project.

If it doesn’t work: stay away from it and look for more realistic dreams.

why? You know what you’re getting. New construction is more of a risk if you want it "cheap." But yes, I don’t know Heilbronn, whether existing or new will both be very expensive.

Very expensive. I once entered houses in the eastern part of the district < 400k. I get a total of 5 properties, 3 of them under 100 sqm living space, another has been a shell for years, and the last one doesn’t really have a garden but scores with a ceiling height of 1.95 m. You can put money into all of them again.

Such statements can only come from people who don’t have children and whose bus runs every 10 minutes right outside the door. Besides, a small car, which you maintain yourself, costs as much as a monthly bus ticket.

So sorry, it was said Heilbronn and surroundings and not the absolute last cowbell of the district, with a commute under 2 km. Yes, I stick to it, a second car (not cars in general) is not necessary. However, giving up comfort probably won’t rescue the situation here anyway.

Assume that you have to pay a monthly installment of 1,600 euros for the financing. Now calculate this installment minus the current cold rent plus 200 euros additional monthly costs for the house and simply try to set aside this amount every month over a longer period without any ifs or buts. If that works, you will already have significantly more equity and can dare to undertake the project.

If it doesn't work: stay away from it and look for more realistic dreams.

I believe they should be able to manage the 1,600 per month. The problem I see rather is that with their plan, the financing deal is not secured at 1,600 per month. Not even at 2,000 would it be.