Evaluation of unexpected home purchase

Good day everyone,

In the past few days, I was "overrun" by a house viewing nearby. Originally, I did not want to buy a property for owner-occupancy in the next 10 years; rather, a capital investment with several residential units was planned. But also not within the next 5 years. However, everything fit during the viewing and we (both 25 years young, children planned but not before 5 years) "bought it" on the spot.

Briefly about the key data:

Detached single-family house from the 70s
Purchase price 300,000€ Modernization costs 50,000€ Ancillary costs (real estate transfer tax, notary) approx. 26,000€ ----- Total 376,000€ Equity: 70,000-90,000€ Previous monthly income: Salary M: 1,400€ Salary F: 2,000€ ----- 3,400€

M's income will also increase to 2,000€ from this month, so we will have a net household income of 4,000€.

Financing: Annuity loan 255,000€ 1.10% effective annual interest rate, 10 years fixed interest period, installment 650€ with 5% optional special repayment KFW loan 50,000€ 0.87% effective annual interest rate, 10 years fixed interest period, installment 190€ Total approx. 840€ monthly Although we are considering taking a KfW loan in the amount of 100,000€, as some work would have to be done on the house. But we will have to discuss that again.

Until recently, I earned 1,400€ net working as a commercial employee in a craft company, as I only worked part-time alongside my studies. Although I have not finished my studies yet, I am almost free of exams, which is why I now work full-time for 2,000€ net per month. It is expected that my salary will rise somewhat in the next few years. However, F wants to begin a dual study program next year, so her income will probably decrease from 2,000€ to 1,100-1,200€ over a period of 3-4 years. Therefore, we chose a low installment and would use the 5% special repayment option when possible.

We think this is feasible, and you? However, we would like to consult an independent advisor. Does anyone have a recommendation in the Ruhr area (Essen)? Or what do you think of the financing offer?

I love spontaneous decisions - they are often especially good. The financing is tight but apparently you know how to save and how to actively influence income. In addition, one must be quite positive about life to make quick decisions into the unknown that take years for others. It is these qualities that help one through tight financing. These qualities are also often what truly distinguish happy people. Sometimes people stand in the same room. Some see the walls, others the doors and windows. Good, if a few wall-watchers also speak up. I can recommend a good advisor via PN 40km outside Essen. 1.1% sounds to me not optimized.

I think that should still be acceptable. The annuity loan at 1.1% for only 10 years is pretty bad. For 1.1%, at least 15 or possibly 20 years should be possible. I would not lock the whole thing in for only 10 years. €50,000 for a modernization can be used up quickly. That is a risk.

Why does one only take 50K€ KFW, although the condition there is better than the main loan, which also only has a fixed term of 10 years?

Condition generally too expensive.