Financing - Loan agreement signed

Hmm, purely in terms of the house + property, we also end up at 4.5 times, but the renovation... more like 6 times. Because it was so ridiculously cheap. The bank would have given us twice as much, but my husband was already extremely afraid of the incredibly high debts. I admit, I didn't care. Even if it had gone completely wrong, I could never have fallen lower than where I had lived my entire previous life, so absolutely no risk. Today I see it differently, today you have something to lose.

: okay, then you can really sleep peacefully. With the apartment building in the background, that's really solid. That simply wasn't known. Which part of S are you from?

Well, calm is something else, I would prefer less debt, but it's not like I can't sleep anymore. But still good to know that we have something in reserve. Otherwise, we wouldn't do something like that. Originally, we come from Esslingen

I personally would always draw the line somewhere at triple, maximum quadruple the 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 in our area even the semi-detached house is slowly exceeding the 1 million euro mark, I would probably rent again nowadays and invest the equity diversified in dividend stocks.

I don’t think much of such guideline values if one wants to deduce from them that someone who exceeds these values should not build or that such a person can be assumed to be over-indebted based on such a value.

These are extremely rough guideline values that can be applied under certain circumstances for “normal,” i.e. average income, employment situations, and standard land value regions – in metropolitan areas, for self-employed persons and home builders with a debt-free rental property or above-average income in the background, it doesn’t work, which can also be regularly observed here.

Yeah, we know that, you tell us every day.

Well – depending on how you calculate it, I am (was) still above the 4 of . What Steffen writes sometimes sounds pretty pompous to some, but one can certainly ask oneself whether that really is the case or rather who actually takes the greater risk.

At least my bank advisor does not have sleepless nights, and if he does, it’s not my fault.

Best regards
Dirk Grafe

.... in metropolitan areas, for self-employed individuals and home builders with a debt-free rental property or above-average income in the background, this does not work, as is regularly observed here.

I can only confirm that. Both the business model of the self-employed works completely differently, and the ratios in metropolitan areas look entirely different. The employee has more or less the same income every month and all deductions occur immediately and always in a constant amount. The self-employed have more or less fluctuating income and expenses. Both tax prepayments and back payments are usually in five-figure amounts and with a 14-day deadline; unexpected costs can arise at any time. I believe any employee would feel unwell if they had to manage both the income and expenses of a self-employed person overnight. These are two completely different worlds and risk profiles and, in my opinion, not comparable at all.

A general statement, similar to a golden balance rule, about who can bear which debt or what is optimal, I do not consider possible. Everyone must calculate and estimate that for themselves.

I believe every employee would feel sick if they had to manage both the income and expenses of a self-employed person overnight.

Since you just mentioned "not generalizing," I ask you to also pay attention to that yourself.

There are said to be employees whose job is to manage a self-employment.