Bank loan to finance house purchase during parental leave

Hello everyone,

I am currently wondering if and how a bank would finance a house purchase for me. Briefly about the situation:

My husband and I are pregnant with our second child. We live in the Munich area and it is simply impossible to find an affordable apartment for our small family. We are already paying > 1000 euros for 80 sqm and cannot find an apartment under 1500 euros if we want to live acceptably with 2 children. Typical Munich.

I come from northern Germany originally and we have been considering moving back to the area for some time now. We want to do this at the beginning of parental leave. We can find apartments/rental houses there for 500 cold and also have enough greenery around us so the children can spend plenty of time outside. Once I have a job in the north, we thought we would buy a house.

Now I am wondering: Can we not move directly into homeownership? Into a small town where four larger cities and corresponding employers would be easily reachable for me.

A reasonable house costs about 150,000 there, we will bring 30% equity, so the loan installment would not be higher than the rent. Additional costs are certainly higher, but all in all we are well below 1500 € per month.
There is also my husband, but he is self-employed and has an irregular income of about 1000 net. Therefore, I would take out the loan.

Is that possible? Does anyone have experience with this?

Current income:
Me: 3000 net
Husband: about 800-1000
Parental allowance will be: 1800

Best regards and many thanks,
Fritzi

So I understand correctly, you want to buy used and not build?

Well, I was in the last month of my parental leave back then. And despite a letter from my employer stating that I would return to work full-time, we were advised to wait another month.
I am also the main earner in our household, and the banks understandably have difficulties with that.

Only you can judge whether the money will be enough for you. Whether the quality of a 150k property is sufficient for you, as well.
Otherwise, I would advise you to proceed with the house purchase as quickly as possible so that the bank doesn't even notice that you are pregnant.

Correctly understood. Our idea is also that in the second year of parental leave, I will look for a new employer locally (since I have one year time and some savings as a buffer, I am not worried, I have a very good education and a good CV). But the bank will also realize this if my employer is located 800 km away from the property.

What if we buy it as an investment property and move in during the first year, is that maybe possible?
Are the interest rates higher there, do you or someone else know that?

What if we buy it as an investment property and move in during the first year, is that maybe possible? Are the interest rates higher there, do you or someone else know that?

That will not work. This is not about the "worse interest rate." With a net income of (1800€ + 800€ - I am deliberately taking the lowest values here) 2600€ - 1000€ rent including utilities - 1400€ living expenses (lump sum), you cannot request an investment property loan from the bank. The financial requirements to finance even a "pseudo" investment property are much higher than for owner-occupancy.

It would make more sense to have a child, finish parental leave, look for a job, rent briefly or stay with relatives, get through the probation period (here comes the next problem), search for a house, finance it.

Of course, you could inquire with the current net income (3800 euros/month). Compared to single-family houses, this is not generous, but with an assumed 30% equity (already after deducting incidental costs?), it would probably still be a solid financing.

Then you just have to find a bank that finances 800 km away. (It would be easier to find a bank locally, but you don’t live there yet...).

Apart from that, the question remains whether you really want to take this risk. And even when looking for a new job, the property could prove to be an obstacle (or you accept a long commute).

I would first stabilize the professional situation. Then buy/build.

Also: Is the income from self-employment independent of residence? Or are the clients in Munich?

My husband's income is independent of his place of residence. His clients are everywhere; he works online. But you are right, better to rent locally first, look for a job, and then see. I will still go to the bank and ask, but in the end, the gut feeling is just too strong. And if you then finally find the dream house at 10% higher costs, it's also frustrating. Thank you for your answers!!