Financing Home Purchase Assessment

Hello everyone,

my wife and I would like to buy a single-family house with the following conditions. I would be interested in your assessment of the framework parameters, and whether financing with the low equity makes sense or not. The relatively good income situation has only existed for 1.5 years, therefore unfortunately no higher equity has been accumulated.

General information about you:

[*]How old are you? 35
[*]Are there children? 1 child, 2 years old
[*]Are more children planned? Possibly another child
[*]What do you do professionally? Both permanently employed, relatively secure jobs - wife part-time (23 hours/week)

Income and asset situation:

[*]What income do you have (gross/net)? Net: He: 5200, She: 1200
[*]How much child benefit do you receive? 220 EUR
[*]How much equity do you have? 50,000
[*]How much equity do you want to put into the house project? 40,000

Current housing costs:

[*]1,250 EUR

Expenses insurance, car, living, daycare, hobbies: 3,100

Balance every month approx. +2,100.
There could be a bonus of approx. 11,000 EUR gross per year, but it is not included for safety reasons, since it is not fixed.

General information about the property:

[*]How large is the plot? 1,100 sqm
[*]Year of construction 70s, 1 garage, single-family house, approx. 220 sqm usable area

Construction or purchase costs:

[*]Purchase, incl. incidental costs 650,000 EUR
[*]Move-in, furniture (kitchen), some renovations: 50,000 EUR

Cost breakdown:

[*]Total costs 700,000
[*]Deductible equity 40,000
[*]Financing sum 660,000

Hello, welcome to the forum.

Spontaneously, I would say that’s possible. It’s quite a lot of money, but 100 times net income is still acceptable according to the rough rule of thumb. (110x max or so).

Built in the 70s, 1 garage, single-family house, approx. 220 sqm usable area

Has the house been renovated yet? Is it up to date? Gas, oil, or heat pump? Tell us a bit about the house.

Hello, thank you very much for your answer.

Yes, the house is renovated and could be inhabited immediately. However, cosmetic work needs to be done (painting, kitchen, one bathroom renovated) so that one feels comfortable.
Unfortunately, it has an oil heating system from the 90s. Which data would be relevant here?
The house is in good condition (new windows, new roof) and is here in the area (in BW) with these parameters priced lower than other offers on the market.

Which data would be relevant here?

Important, what would probably cost money are the mandatory insulation measures as well as possibly new windows, new electrical installations, or the desire for underfloor heating if there is none. The DB now has to be insulated, I don't know what the situation is with the oil heating.

The house is in good condition (new windows, new roof) and is cheaper here in the area (in BW) with these framework conditions than other offers on the market.

And is there a reason why someone would leave money on the table in a sale?

I ask myself why, with so much income, so little equity is available?