First home financing for house purchase - short-term and at a loss

2018-05-29 12:02:09

Hmm... I already see a few mistakes there.
For groceries/drugstore/pet food, you wrote €100. I don't believe that. That would be like you only feeding yourselves with sandwich bread and strawberry cheese. (Yesterday, I paid almost €50 for necessities at the drugstore, including detergent, toilet paper, dental hygiene, etc.)

The item "repairs" probably refers to the cars? What about inspections and such? And if the cars no longer need those regularly because the warranty is over, then you should still set aside some money for a new vehicle.
You should calculate €500 per month for one car. That already includes replacements.

If you are very frugal, don’t eat out or go to the cinema, have no vices like smoking or buying a sandwich or coffee at work every day... don’t buy gifts or medications or occasionally treat yourselves to a bottle of wine, never have a beer or tea with friends, leave the grill in the shed, then the other figures might add up... However, the word "pet food" confuses me then... there’s an animal that will probably cause other costs as well.
What about doctor’s bills? Dentist? Supplemental insurance?
Term life insurance? Disability insurance?

If I were you, I would recalculate everything very carefully and be honest, not just write off things as a one-time expense.

With your salaries, I don’t see a problem making €180,000 together... but an old house can quickly put a strain on your wallet.
How old are you? Around 40?

2018-05-29 12:12:09

Forgot earlier: if 27,000 is all the equity, I would never put it all into the house.

For example, what will you use to pay for your wedding?
We financed through the Sparkasse and got weekend ads for consumer loans like: washing machine broken - we help. I find that quite telling...

2018-05-29 12:12:57

So food, to be honest: I don’t do the shopping. I know that my better half goes shopping twice a month and spends about 50€. Ok, maybe a little more with the "in-between purchases." Like "just quickly" picking up a new loaf of bread and Nutella after work. Or a bottle of wine. Although it's "only" 10€ each time, it adds up if you do it 3-4 times a month. I totally get that... I just doubled it across the board.

Car is... well, something like this: if it runs, everything is fine. I always do the oil changes and the usual small stuff myself. For bigger things, I have a trusted mechanic who does everything at cost price. I just roughly calculated it now... The last bigger expenses were an air conditioning inspection (50€, yearly), timing belt change (250€, every 4 years), and tires (240€ every 4 years). Broken down... 250+240=490 490/4=122.5 122.5+50/12=15€ per month Clearly, you always have to buy consumables for the car from time to time... that’s how I came to 40€ per month. I’ve never owned a new car. I have always bought used ones for 3000€-5000€ and driven them for 10+ years.

Food was actually for our dog. But there’s hardly anything there. I’d say 15€ per month. And as you already said, cinema, weekend parties, having a beer with friends... that was all once... Yeah, "occasionally" getting the grill out is still possible now and then, although I see that as modest too. 2 steaks from the special offer 6€ + 6 fake beers at 70 cents each. That’s our luxury life. It’s not that we don’t treat ourselves, but our own four walls are simply more important to us than going out every weekend.

2018-05-29 12:48:16

So honestly, when it comes to groceries: I don’t do the shopping. I know my better half goes shopping twice a month and spends about 50€ each time. Okay, maybe a bit more with the "impulse buys." Like "quickly" grabbing a new loaf of toast bread and Nutella after work. Or a bottle of wine. It’s usually “only” 10€ each time, but it adds up if you do it 3-4 times a month. I totally get that... I just doubled the estimate across the board.

The car is... well, something like this: if it runs, everything is fine. I always do the oil change and the usual small stuff myself. For bigger things, I have a trusted mechanic who does everything at cost. I roughly calculated it now... The last bigger expenses were an air conditioning inspection (50€, yearly), timing belt change (250€, every 4 years), and tires (240€ every 4 years). Broken down... 250+240=490 490/4=122.5 122.5+50/12=15€ monthly Sure, every now and then buying consumables for the car... That’s how I ended up at 40€ a month. I’ve never owned a new car before. I always bought used ones for 3000€-5000€ and drove them for 10+ years. The food was actually for our dog. But hardly anything adds up there. I’d say 15€ a month. And as you already said, going to the movies, weekend parties, having a beer with friends... that was all a thing... Yeah, "occasionally" bringing out the grill is still possible, though I see that rather frugally. 2 steaks from the special offer 6€ + 6 bottles of beer at 70 cents each. That’s our luxury life. Not that you wouldn’t treat yourself, but our own four walls are just more important to us than going out every weekend.

Well, those are just small amounts that you let slip under the radar, but they add up in the end. Even your 5000€ car has to be bought at some point. It’s not about “showing off” or partying, but you do have social contacts that need to be maintained from time to time. Even if only at home, it’s not just one bottle of wine or a six-pack brought out. Your grilling costs you 10€, but you leave out the ketchup and the bread. Like this, costs for laminate flooring of 20€ per sqm, which you install yourself, quickly become 30€ per sqm because the glue, wooden blocks or springs (no idea), and also the baseboards cost money.

The financiers will calculate something different for you anyway...

Regarding the household budget book where every cent spent is recorded, I recommend you do that. Also for the future.

I don’t want to discourage you, just make you aware.

2018-05-29 13:09:06

I don't want to talk you down, but to raise your awareness.

I'm not assuming that about you either.
Quite the opposite. I'm grateful for that because it also opens one's own eyes.

That is exactly the kind of thing that seems absolutely obvious, and that's where people unconsciously turn a blind eye - or even two.
And I saw that in the tabular overview.
According to the rough calculation, there should be €2,000 "left over." But in the account at the end of the month, there is only a plus of €1,100-1,300 overall.
Yes, and then you wonder, of course, where the money goes? A little thing here, a little thing there, then the wheel is broken again and you have to put down €30 for a new tire...

But overall the conclusion clearly tends toward:
Better to play it safe and choose a lower repayment rather than overextend and be unable to pay the installments.
And is it then actually sensible to at least keep part of the savings?
The lady from LBS wanted to convince me to declare everything because that supposedly lowers the interest rate. But I wonder whether I borrow €189,000 or €194,000... how big will that difference actually be? Maybe just in the 0.x range?

2018-05-29 13:23:46

I recommend a household ledger, where every cent spent is recorded. Also for the future.

I say: a household ledger is too short-sighted. Budget planning is much more effective (which then, of course, must be followed or adjusted during the month). Since we have been doing this, we tell our money in advance what it has to do instead of looking afterward where it slipped away. Unfortunately, the only really comfortable software we have found is "YNAB," cloud-based and from the USA and paid, but that is okay for us.

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First home financing for house purchase - short-term and at a loss

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