Experiences buying a house without equity?

Thank you for the previous answers!

It is a house from a developer, yes.

In fact, we already have a financing commitment from a bank with the parameters mentioned above.

Our "problem" is the following: a major part of the financing is the kfw 300 promotional loan. However, we are only eligible for this if we complete the financing promptly (this year), as our income is usually too high. We are just "lucky" that in the two years relevant for the loan we were alternately on parental leave and therefore fall under the specified income limit.

2 civil servants in their early 30s with 5,800 EUR net. Civil servants are actually the only occupational group for which one can reliably expect a steadily increasing net income and, moreover, an absolutely adequate pension is guaranteed. Where are the 5-6% interest rates supposed to come from in 10, 15 years? We currently have 3%, and that is already causing the worst recession in the construction sector in 20 years. If you can't do it, no one can. You just mustn't lose your mind and assume, with the motto "You only build once," that you have to put up a villa that outshines Dieter Bohlen. You shouldn't approach something like this with the motto: If it's not a Mercedes, then I don't want a car at all...

Thank you for your answer! It is a "modest" semi-detached house, although we are fully aware that the gilded faucets are not possible with our situation :)

Where are the 5-6% interest supposed to come from in 10, 15 years?

Well, interest rates are still historically as low as never before. Why should they remain that low in 10-15 years? There is not even the slightest hint of a forecast for either one or the other with that time horizon. But one should not assume consistently rosy interest rates like in recent years (and still today).

If you can't do it, no one can.

No kidding: The creditworthiness is actually really weak for full financing. After purchase and financing, the family is overindebted. As a company, you would have to file for insolvency. You can do it, sure. But it is not a no-brainer and nothing must go wrong.

Well, the current interest rates are historically still as low as never before. Why should they still remain so low in 10-15 years? There is not even a hint of a forecast for either one or the other over that time horizon. But one should not assume always such rosy interest rates as in recent years (and even today).

No joke: The creditworthiness for full financing is actually really weak. After purchase and financing, the family is over-indebted. As a company, one would have to file for insolvency. You can do it, of course. But it is not a no-brainer and nothing must go wrong.

Of course, interest rates can be at 8% in 10-15 years. But inflation will not have been at 2% in the meantime, because a real interest rate of 6% cannot be tolerated by an over-indebted society like today’s. In this respect, the comparison to earlier times is absurd anyway. We had construction interest rates of 4% in the last 2 years, but also an inflation peak of 10%. This has fallen somewhat now and wages have only partially increased, but the truth is quite clear: real interest rates have been significantly lower in recent years since the interest rate increase than during the zero interest phase, and only during the last few months has the real interest rate risen at all into positive territory.

This means: of course, wages do not have to fully keep pace with inflation. But if we stand at 8% interest in 10 years, then the house will not cost 450k new in 10 years, but easily 800k or more. Wages will be noticeably higher at least in nominal terms, even if the factor may be lower. That means: better to secure moderate interest rates now. Of course, you have an interest rate risk in 10-15 years, but then on a loan amount over which you will laugh in 10-15 years.

Whether the interest rate risk will really kill you then depends on the individual parameters. That is a basic analysis first without reference to the OP.

And now to the individual situation:

Why don’t you have any equity? I know you are young and have a child. But no equity at all? Even as a civil servant, you finish your studies at 25 and after 5 years you should have saved more than just a small emergency fund. It’s even better if you start without a degree. This question is not a criticism but extremely important to assess whether you can afford the project. Where did the money go and why do you think you can forego these expenses in the future?

How do you actually want to pay for the kitchen and furniture? Is all that already included somewhere and I missed it? Otherwise, you live in an empty house with little chance of fixing that anytime soon.

Otherwise:
With about 5k net after private health insurance, you can roughly afford a 2.5k rate. Life will of course be modest. Over the years you will grow into the rate, your first raise is coming up soon. There are interest rate risks, but since you as civil servants can expect a steadily increasing income (excluding strokes of fate), I consider that bearable, also in view of the higher pension compared to the state pension, which in any case provides a certain buffer.

Therefore: if you absolutely want the house, then you probably have to act now because of the subsidized loan. Financially it only works because you are civil servants, but expensive vacations won’t be possible for a while.

Gmoje,

if about 50% of your net income (without [PKV]) goes towards installments and additional costs, it is a tight squeeze. you can do it but you don't have to