Financing single-family home - land available

2021-04-11 11:42:55

My problem? I actually believe in the feeling that nothing can go wrong. Don’t you know that? Can you all manage your financing with only one salary? I don’t see that with us. It would certainly work for a few months, but in the long term, I wouldn’t want to restrict myself like that.
At the moment, I calculate all additional costs, cleaning lady, and living expenses with expenditures of about 3,000 EUR without savings rate. That would be our current standard of living. Certainly reducible in the short term as well, but in the long term I don’t wish that and also don’t believe we would come under 2,500 EUR in the long run. In addition, there are desired savings rates for vacation, retirement, children, car, etc.
In the transition period between the beginning of external care for K3 and the start of the second year of life (then the daycare here is free or only meal money is charged) about 400 EUR in care costs are added. Without a second income, that is not affordable for us.
I always have in mind that financing has to be manageable with one salary.

Income with K3 would be:
Life month 1 - 3 of K3: 6,900 EUR + company car
Life month 4 - 9 of K3: 5,600 EUR + company car
Life month 10 - 16 of K3: 5,800 EUR - company car installment of 300 EUR, which my husband has to pay himself during the [EZ].

2021-04-11 11:49:14

This is being asked here whether it fits.
Personally, I don’t see a problem – if it gets tight, the savings rate for the vacation will be cut or/and the cleaning lady dismissed. There is the 800€ buffer that can possibly help.

Luxury little problem, I would say.

I still don’t understand the question, seriously. Who else in Germany should be able to build a single-family house with a total volume of 700k-800k, if not families with such conditions:

Especially since the family only needs a 575k loan. So come on, people, really.

2021-04-11 11:55:54

With a repayment of 3% and an interest rate of 1.3%, that would be a monthly payment of about 2060 EUR. I can't imagine that we would reach an annuity of 5% with 3% repayment.

I always calculate with a 5% annuity - regardless of the interest rate. 5% annuity and 1.3% interest means 3.7% repayment. BTW: Do you know the term "house rich but life poor?"

2021-04-11 12:03:41

My problem? I actually think it’s the feeling that nothing must go wrong. Don’t you know that? Can you all manage your financing with just one salary? I don’t see that in our case. It would probably work for a few months, but in the long term I wouldn’t want to restrict myself that much.
At the moment, I calculate total expenses including all ancillary costs, cleaning lady, and living expenses at about 3,000 EUR without savings rate. That would be our current standard of living. Certainly reducible in the short term, but I don’t wish for that long term and also don’t believe we would get below 2,500 EUR in the long term. Additionally, there are desirable savings rates for vacations, retirement, children, car, etc.
In the transition period between the beginning of external care for K3 and the start of the second year of life (then the daycare here is free or only meal costs are due), there will be another approx. 400 EUR in care costs. Without a second income, this is unaffordable for us.
I always have in mind that financing must be possible with one salary.

Income with K3 would be:
Life month 1 - 3 of K3: 6,900 EUR + company car
Life month 4 - 9 of K3: 5,600 EUR + company car
Life month 10 - 16 of K3: 5,800 EUR - company car installment of 300 EUR, which my husband has to pay himself during parental leave.

Honestly, what are 16 months compared to 30+ years of repayment? A drop in the bucket. The times when such projects could be carried by the broad masses with one income are long gone, if they ever were possible at all. I assume you’re certainly not building somewhere in the Hunsrück either.

It’s best if you browse through the forum a bit. Then you’ll see how relaxed your situation is compared to 80% of the Harakiri financings here in the forum dealing with similar sums. :)

2021-04-11 12:11:00

Don't you know that? Can you all manage your financing with just one salary? I don't see that with us. It might work for a few months, but in the long run, I wouldn't want to limit myself that much.

Describe the situation that would take away this worry of yours. Every partner earning €5000 net, then you would be reassured? Well, then you will probably never own property. Or if you did have €5000 twice, you would probably buy a more expensive house and the dilemma would start all over again.

By the way, we "have to" pay for the house with one salary, simply because we have two very different professions that lead to a very large salary difference. If it weren't for my salary, we could go on welfare, to put it plainly. And? Everyone has their role/focus in this game. You can't escape the responsibility, the risk. You are in the nice position of having leeway. Both have well-paid jobs that could be supplemented. You can also reduce the vacation savings rate sometimes, hiring cleaning help is also a luxury, there are often levers to find with the car as well. Plenty of screws to turn very quickly if things get tight.

2021-04-11 12:19:23

I know it as House rich but cash poor. It can actually happen to us. Especially if only one person is working. Or just short-term during parental leave. Although I would honestly say that with 2 salaries as before and 3 children with a rate of 2000 EUR and thus 4,900 EUR cash for living and saving, I would not consider that cash poor. That would be quite exaggerated. My problem, as already described, is more the thought of something going wrong, for example one person becoming unemployed and the whole thing not being able to be carried by one person.

And a flat 5% annuity also seems a bit short-sighted to me. 3% repayment is often considered healthy. How high a healthy annuity then is depends on the individual interest rate. And it probably won't be 2%. Although I would already find it problematic if a worst-case 400 EUR higher rate would break our neck. Then the structure would probably be too tight. And I am exactly afraid of contingencies like follow-up financing or similar.

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Financing single-family home - land available

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