Buying a house with a child on the way – still financially feasible?

Good evening everyone,

My wife and I have been looking for a nice house for well over two years now, but unfortunately, we’ve always had bad luck until today. The market where we’re searching doesn’t offer much at the moment (Jüchen, Grevenbroich, located in the Düsseldorf and Cologne catchment area). Our first child is due in the next few months and I put everything into Excel again, and looking at the numbers, I’m getting nervous. I’ve always been lucky to have a good savings rate until now, which is why the amount at the very end worries me (perhaps unfounded).

I’ll start simply with the guideline about the current situation and partly address the future.
General information about you:
Age: Me 30, Her 29
Children: First one in 6 months
Occupation: Engineer 37.5h - She is a preschool teacher 39h. Both covered by collective agreements, both permanent contracts.

Income and asset situation:
As of today: €2750 + €1830 each SK 4. Holiday and Christmas bonuses and other bonuses not included.
Parental leave: €3100 (III) + €1200 (V) + €210 child benefit (We missed switching to 5/3 for more parental allowance)
After year 1: €3458 (pay grade increase) + €900 (20h) + €210 child benefit
Equity capital: Currently still scattered since we got married last year and each still “owns” their money first.
Me: €42,000 checking + €10,500 daily savings + €25,000 home savings contract
Her: €10,000 checking + €11,000 savings book (new car this year, so €11,000 are actually available)
Total equity capital: €86,500.
Equity capital for the project: €65,000 + depending on when what comes in.

Housing costs:
Cold rent: €600
Warm rent: €800

House costs:
Without incidental construction costs and broker fees, we always budgeted €350,000 for an absolute dream (existing property) with a slight buffer up. Older existing properties with renovation are also an option.

In my opinion, the requirements for the house are down-to-earth.
Living space: 110m² - 130m², preferably with a cellar. With a utility room on the ground floor, more living space.
Plot: 300-500m². Small garden, space for herbs, barbecue, terrace - nothing fancy.

Expense situation:
See attachment. Baby and incidental house costs are estimated items. Are they realistic? This February I met with my insurance agent regarding private pensions. Estimated -€200/month. Kita fees are also still missing.
As mentioned at the beginning, I’m panicking because the amount left after expenses has been noticeably lower after all these years of peace of mind, or do I have legitimate concerns?

Thank you very much for your feedback and have a nice evening.
Best regards

To be honest, I wouldn’t be so worried about such a surplus at the end of the month. But I think I am also shaped accordingly. At our home (that is, in my parents' house), money was always tight because of the high mortgage payment. It still always worked out. The 300 euros for the child will (apart from the initial equipment) be enough for now, but of course external care comes on top then.

Hello,

you have good equity and did not want to buy something unaffordable. Stick to your goals. Anything above 400k would make me uneasy. And of course, it is clear that you have to make compromises when you have a child.

Sports club €17.50: Isn't that an annual fee? The incidental costs of €500 are generously calculated. Although you should set aside whatever is left as reserves. I can't say anything about the child. I find "Miscellaneous" with €100 quite low, considering that this probably includes purchases like a new TV, laptop, washing machine, decorations, excursions, etc. What about vacation? What about wear and tear or car repairs? (Brakes, inspection, TÜV...) Really considered everything? I don't want to put it down! Your equity (and thus your savings rate) is quite good for your age. The plan should somehow work with a clear conscience!

Just calculate the other way around, what the house costs you now. Let's assume the current situation, you would need to finance about €320k.

With an initially relaxed repayment of 2% (you are still young and have time to pay it back, or you could increase the repayment later) and an annuity of 4.5% (then you have rather 20 years of fixed interest), you come to a "cold rent" of €1,200.

Does that scare you? That's only 1/3 of your income, so quite manageable. If your wife works a little more, it looks even better.

P.S. The second year of kindergarten for children over 3 is now free in NRW. That helps a lot too...

It's good if something remains. That is not little and should cover the positions that listed. However, the numbers in your breakdown confuse me: I would never write €123 anywhere, but rounded up to €130, so that the next increase is already included in your calculation. Also, I wouldn't tighten the filter of your search so much (if you even entered it): many potential properties are excluded as a result, because information is sometimes not provided, sometimes entered incorrectly. A 297 sqm plot of land is also great.