Financing - Loan agreement signed

I actually agree with you on all points! And I can understand and accept everything. Believe me, we are also rather somewhat conservative...

My husband already keeps me grounded and I am not unreasonable either and want to be able to sleep at night. We also have responsibilities towards our child.

I also cannot understand some banks. But not the borrowers either!

Regarding our debts, everything is within limits. We still have a large rental house, debt-free... if I were to sell it, we would even have money left over. But I don't want to. Therefore, I'd rather have a loan! By the way, this house is in the Stuttgart area. I’m also from the region )

With this setting, you might soon have to fall back on your collateral...

And no, I don’t know your financial situation, which I also (no offense intended) don’t care about, because it’s your thing. You have to feel comfortable with it. I just said that it wouldn’t be for me.

Regarding the bank: I have heard of cases where customers were offered 1% repayment and loans that they could not afford. That is why any collateral is no guarantee for sustainable financing. In the beginning, everything is usually great... the rude awakening only comes after the regular term, when you realize that you can no longer afford the house because either the interest rates are now higher or the calculated repayment didn’t work out.

We were also faced with the choice of a 30-year fixed interest rate or 20 years with significantly better conditions. It now costs us 300€ more in monthly repayment, but hey, I want to be done eventually. I’m not living only for the house and enslaving myself for it. I always say: the house must serve me, not the other way around!

And the way you write that you don’t want to give up anything: do you seriously think that you will carry thousands of € every year to the bank for special repayments for 25 years, or would you rather spend the money on things you want to afford? I bet on the latter... and suddenly... the concept is down the drain.

I find banks that allow this irresponsible, sorry. Because if the financial background were so excellent, you wouldn’t have to take on so much external capital. And only in that case would I not worry.

That’s always dependent on income. You’re condemning that too generally. It really only depends on income. We have "only" a 500k loan but also only a rate of 1200 EUR. The remaining sum doesn’t interest me at all. Not even much special repayment is planned... We want to save in parallel and then repay the remaining amount in one go in 5 and 10 (or however many) years. I find our approach quite good because we keep a lot of liquidity. That only works in times of low interest rates... We pay about 1.85% on the loan and I manage to save at 1-2%.

The low interest rates are rather counterproductive for homebuilders, at least in the greater Munich area. I bought for 900 euros/sqm three years ago (from equity, which the bank then credited as 600 euros/sqm of equity for the home loan (fixed for 10 years at 1.9% back then) due to the price bubble at the time), and now the neighboring plot went for just under 1500 euros/sqm. More than a 60% price increase for the interest rate having fallen by another 1% since then – and construction costs have also risen significantly. For potential builders, this is more of a disaster... Our new neighbor's budget for a single-family house on 500sqm of land will probably be over 1.3 million... - that would be economically irrational even on credit at 1.75% interest and can only be explained by the fact that there is so much money available here in the South, desperately searching for investment opportunities even at zero returns.
Paying off 720 thousand euros over 25 years at that interest rate with regular special repayments will ultimately cost you about 3000 euros/month for 25 years – a lot of money for a semi-detached house (160sqm?), especially since your equity is already included there. Personally, I would always draw the line somewhere at three to a maximum of four times gross annual income and a sustainably affordable annuity of at least 6% (previously 4% interest plus 2% repayment, today 1.5% interest and 4.5% repayment, which surely also depends somewhat on age). Otherwise, the risk would be too high for me compared to the undoubtedly existing benefits of homeownership – and since the semi-detached houses in our area are slowly exceeding the 1 million euro mark, I would probably rent again nowadays and invest the equity diversified in dividend stocks.

Hi,

and since then, in our area, even the semi-detached houses have slowly been exceeding the 1 million euro mark,

That really makes you feel sick.

How much further is this supposed to go? A neighbor of ours, a banker by profession, told us that even in Hamburg's upscale area of Blankenese it is already becoming difficult to sell the better properties above the 1 million mark, which some time ago was still considered a completely unproblematic sure thing. However, we are talking about a charming location here, partly on a hillside with a view of the Elbe, etc. Those who still have enough money don’t want to buy the hundredth house, the rest probably can no longer afford it that way, or the pressure to invest money somewhere is not yet that high. How confused I am
Although I can only verify or assess this statement very poorly, this is not my area at all.

I would personally always draw the line somewhere at three times, at most four times the gross annual income and a sustainably affordable annuity of at least 6% (formerly 4% interest plus 2% repayment, today 1.5% interest and 4.5% repayment, which certainly also depends somewhat on age).

but then presumably some people (even here in the forum) should not build a house. we are at about four times.. but we are probably quite an exception..

but we are probably quite an exception..

Yes, we know that, you show us that every day.