Hello and wow. Didn’t know the forum, but so many answers within one night – amazing
The nice thing about an anonymous forum is that you can speak openly. Of course, I also knew that there are many here who don’t just accept the current situation and give me advice (which there was, of course), but simply accuse me without knowing me or express total incomprehension without even knowing further details or anything else.
Thanks for the many answers. Even if sometimes it seems like someone has no understanding for my thoughts or that I somehow appear very layman-like, this discussion exactly brings up what I hoped for in terms of suggestions etc.
I’ll try to answer the questions or respond to the things mentioned so far.
- The hottest topic in this discussion is why we still have debt despite the large income. The explanation is relatively simple and stems from the modern 0% financing world. Although we are both academics and not dumb, we simply live our lives and are the opposite of “save first, then buy.” I claim, like many people. The share in such a forum is probably smaller though.
I could now say that it annoys me in hindsight or something, but no, I decided that myself. We just came back from a 14-day holiday that cost about 10k in total. (Too bad I can’t see some faces now ) We spend our money, and the repayments are simply part of the monthly fixed costs. That means no focus on saving and paying everything off, but it is paid off in installments. For the most part, this comes from university times, which had to be financed expensively by ourselves and there were no building savings contracts or other income from any sources from the parents or anything.
Only during the vacation and now shortly thereafter did the topic of a house come up more strongly again because we had a great one there. The plan was otherwise to only deal with it when everything was paid off and maybe some equity was available. But I’m writing here now to find out whether it makes sense or not to do something earlier. Because only in 5 years it will be questionable regarding interest and sadly, the time until the end of life is shorter.
And we want our own garden… unfortunately we don’t have that, for the kid. Moving into a rental house on short notice, of which there really aren’t many, is also stupid then.
Some of my reactions or questions with answers:
1. Why is divorce a risk and why is it then a total loss – simply because you have to sell the house, so is it only the early resale that is the problem?
2. Unfortunately, there is no house bank. Since 2016 we're entirely with an online bank. Everything is much easier there, except probably that topic now. Where does one go "independently" or is it only possible with an "offline" bank?
3. 4,500 Euro income and saving 3k? Then obviously there are no children and/or no rent? Otherwise, I can’t imagine how that should be a reasonably nice life? What about vacation? Clothes? Food???? I also sometimes eat lunch for only 5 euros, but that can’t always work. With a proper JOB where both work full-time more than 50 hours a week, you have to treat yourself to many things that cost money. You can’t always cook yourself, you eat out, etc... I also need suits and shoes, etc... and they don’t cost 200 euros off the rack...
4. We of course both have risk life insurance (LV) each for 25 years and each 300k in case of death... that alone for the child/children. Disability insurance (BU) would of course also come with a house purchase.
5. What is meant by "abnormal" months? We actually have a constant income.
That’s a start... everything seems to concentrate on our monthly expenses... Roughly – I need to update that – about 2,500 euros for FIXFIX costs, that is what always goes out... rent, car, insurance, loans, internet, etc.
Plus about 1,500 euros which I call fixed-variable, that is what is paid separately, but you can’t really resist it, mostly food, clothes (mostly the child, of course), fuel, and many cash withdrawals for lunch break money, weekend activities, etc.
So roughly 4,000 euros “fixed” go out with us.
Please don’t get me wrong – I’m not saying now that I 100% need a house now and it absolutely must work. I already thought it makes sense to be debt-free first, that then really has a big impact on the money left over that can then flow into the house.
It only bothers me that it takes forever to first save tightly to be debt-free faster, then save time-wise until you have equity. That’s just stupid as described above because then you only have a house in 5 years. So I think the banks must also evaluate it the same way, that at the beginning it is maybe calculated somewhat tighter, but from year 5 on it’s something completely different.
But that sounds and is probably so naive, I can already guess the answers
My opinion and comments as well:
Without prejudice now, to me it looks like you have no discipline in financial matters, which is absolutely necessary when building a house, and you “need” some status symbols and now a house has landed on the “want-to-have” list.
You emphasize that you can’t buy suits off the rack for 200 euros, apparently expect some envious faces because you spent about 3,000 euros per person on your last vacation (I assume with a child) (or did you mean that was cheap? I myself spent almost 10 years ago, when you still got value for your money, also once 8k euros per person for a vacation…), lunch for 5 euros is below your standard, so taking a sandwich to work wouldn’t even be an option, and back then probably a used Golf was not enough for the car, it had to be a new car of a premium brand???
If you now don’t have money or don’t want/can’t restrict yourself, you won’t be able to do that with a house either and, if money gets tighter, you’ll take out more small loans.
Whether it makes sense now, when interest rates are relatively low, to first save large equity is difficult to answer, but you should try at least to live on a smaller scale for 6 months and pay off the debt in the meantime.
During that time you can already inform yourself, plan, visit, etc...