Can we afford a house?

Hello

My husband[32] and I[30] are considering whether we can afford a house. We both earn about 4000 net and after all deductions we now have about 1100 left. According to our calculations, we could afford a house but also if a child comes?

With a child, we have calculated that after all deductions we have 200 euros left. That seems too little to us and so we ask ourselves whether we should buy a house or not. If we have a child, my net salary of about 1800 will disappear. Then I only get child benefit and parental allowance, which is about 1100 euros. Or are there other income or subsidies that can be applied for?

Parental allowance? That doesn't exist anymore.

She means the parental allowance.... You can forget about funding grants with your income.

If you don't have any other loans running, I would say that could work. However, the equity you bring is important. With your salary, a loan of about 250,000 is possible, maybe a bit more. But you will certainly need 300,000 to 350,000, depending on land prices, even more.

Hello,

We are just not sure if 200 euros will be enough to cover what remains. For example, if the car breaks down or the washing machine, etc., are there otherwise no options to apply for assistance if the money is not sufficient?

How much equity do you have available?

I think it is especially important, even after the construction phase, to always have at least €6000-10000 in the savings account. And if you then save about €200 per month on top of that, a broken washing machine or a car repair won't immediately throw you off track.

Hello,

We’re just not sure if 200 euros will be enough to cover what remains. For example, if the car breaks down or the washing machine, etc., are there no other options to apply for assistance if the money isn’t sufficient?

What you can apply for is a personal loan .... but that will eventually get you into trouble. The subsistence minimum in Germany is about 1100 € per month; if you earn less, you can apply for a subsidy from the government. But if you are only below that because you have an expensive loan, that’s your bad luck.

Okay, but to your original question:

Your husband earns a net of 2200. If you go on parental leave now, he has about 2500 net due to tax class 3, your net salary is 1170 €. Together you then have 3700 €. That is basically enough to finance a rate of about 1000 €. I would also advise you not to go significantly higher. Because there is always the risk that you won’t be able to go back to work after parental leave, or only part-time. As a result, with tax class 5 your salary will fall below 1100. If you go back full-time, the salary advantage will probably be offset by the cost of daycare.

For a monthly rate of 1000 €, you can probably get 250,000 € without equity; in addition, you have to calculate + 300 € monthly ancillary costs for the house. But for 250,000 €, you won’t get a new build with land. Maybe a mid-terrace house with little land and 100 sqm living space. But that varies greatly by region. A good friend bought a mid-terrace house here in Karlsruhe (land price 550 € /sqm) with 110 sqm living space and a carport... in my eyes a shoebox, for a modest 330,000 + 40,000 ancillary costs.

Equity is the key to the house. I would advise you to have the land + 20,000 cash as equity. Then the 250,000 € loan amount will work out.