House purchase. Can we finance this?

Hello everyone!

I have been reading along in this forum for a while and am now reaching out to you with the following concern.

We (2 adults, 1 toddler) have been looking for a house for quite some time. Last year it almost worked out, but at the last moment someone outbid us by several thousand euros, so we did not follow up. The project was at an amount of 250,000 euros back then, which according to the bank corresponded to a monthly burden of about 750 euros.

Now we have a new property. Estimated costs here are, however, between 280,000-300,000 euros. (200,000 house purchase - probably very little room for negotiation / + 80,000-100,000 conversion or renovation costs)
We are calculating a monthly burden of 950 euros. We have not had a new bank appointment yet.

A new build is not an option for us. Estimated price from the 'preliminary' conversation with an architect is approximately +/- 400,000, excluding the land.

Now about us:

[*]Who are you? If Corona allows, a married couple from autumn 2021 ;-)
[*]How old are you? 30 + 28 years
[*]Are there children? Yes
[*]Are children planned? Possibly +1
[*]What do you do professionally? Employee industrial electrician and employee office/administration
[*]How many hours do you work? 37.5h + 20 hours (just returned from parental leave, tendency rather increasing)

Income and asset situation:

[*]What income do you have (gross/net)? Net: 2050€ + currently due to part-time only 1000€ / in a few years probably again about 1750€
[*]How much child benefit do you receive? 219€
[*]Other transfer payments such as parental allowance, sick pay, etc...? 250€ child bonus + 100€ daycare allowance / but we do not want to consider both as they are 'limited' in time
[*]How much equity do you have? approx. 20,000€
[*]How much equity do you want to put into the house project? Equity is only to be used to cover incidental costs

Monthly expense situation:

Housing costs:

[*]current cold rent: 300.00€
[*]current warm rent: 520.00€
[*]electricity: 80.00€
[*]water, sewage, garbage collection, street cleaning: included in warm rent
[*]telephone, internet, mobile phone: 160.00€
[*]garage: 35.00€

Mobility costs:

[*]monthly ticket for bus and train (also for the children!): 0.00€
[*]car loan (or savings rate for a new car): 0.00€
[*]insurance: 83.33€
[*]taxes: 25.00€
[*]fuel: 200.00€
[*]repairs: 0.00€
[*]others
[*]Is there a second car, motorcycle, scooter? Please list all points again! The costs mentioned above are for two vehicles

Insurance costs:

[*]private health insurance (also supplementary health insurance, daily sickness allowance etc.): 20.00€
[*]liability insurance (also animals): 8.33€
[*]capital or term life insurance: 47.00€
[*]pension insurance (also Riester, Rürup, etc...): 0.00€ (already deducted from salary through salary conversion)
[*]disability insurance: 140.00€
[*]accident insurance: 0.00€
[*]household insurance: 10.83€
[*]legal expenses insurance: 26.00€
[*]other insurances (e.g. travel insurance, funeral insurance): 15.00€

Living expenses:

[*]groceries: 400.00€
[*]restaurant costs: 50.00€
[*]personal care/drugstore: 70.00€
[*]pets (food, vet, medicine, stable costs): 50.00€
[*]medicines/health costs: 0.00€
[*]clothing: 50.00€
[*]furniture:
[*]daycare/school fees (and meal money): 160.00€
[*]tutoring
[*]school supplies and books
[*]club fees/gym:
[*]babysitter
[*]toys
[*]cleaning
[*]TV/video/audio/CDs/DVDs:
[*]tickets (football, cinema, concerts etc...): 30.00€
[*]donations
[*]others: 200.00€

Savings contributions:

[*]vacation: 300.00€
[*]house
[*]retirement provision
[*]hobbies/gifts:
[*]others:

Other expenses:

[*]maintenance payments? no
[*]loans? no
[*]others? no
[*]Was something forgotten? Then please add it here at the latest!

Income and expense totals:

[*]total income: 3269 € (tendency rather increasing)
[*]total expenses: 2681 €
[*]balance: 588 €
[*]of which total cold rent and dispensable savings contributions (e.g. savings rate for house): 600 €

Additionally, the 350.00 euros from daycare allowance and child bonus would still be available. However, only for about 1.5-2 years.

What do you think? Is it sensible to take on a loan with monthly payments of 850-900€ over 30 years given this situation?
According to the last bank discussion, we could also repay a rate of about 1500€, or we could probably borrow 450,000-500,000?! But who could still sleep calmly then?? We don’t want to live just for the house...

How do you do it?

I would be very grateful for your exchange and tips.

You spend a total of €600 on housing, half of which is cold rent?

Otherwise, there is €600 left per month?

A house also produces additional costs and no less than an apartment. So you only have €300 cold rent at most and the unplanned €600 for the installment. And that's it, apart from the items "Krippengeld and Kinderbonus," which I can't imagine. What kind of income is that, I don't know it concretely.

There isn't a penny left to replace a broken household appliance, your cars will certainly need maintenance at some point contrary to the plan above and will also eventually have to be replaced. At €200 fuel per month, they do drive after all.
A reserve for the house should also be formed.

And if parental leave with even lower parental allowance is coming up again, it is then only calculated based on the part-time job, it is finally over.

I'm usually not like this, but here... I see no chance to implement the plan.

This 80 to 100k renovation, what exactly needs to be done? With your income, 200k for the house including additional costs would already be high enough for me.

Thank you for your critical responses.

That's true. Effectively, without cold rent and savings rate, about 1200 euros would remain for us.
The child bonus is given from the 12th to the 36th month of the child's life. And the daycare allowance starts from the time the child goes to daycare until the 3rd year of life. I don't know if that might only be the case in Bavaria.

We are also aware of the issue with the second child. That definitely wouldn’t be feasible. For this, full-time work would have to be resumed first to at least achieve the same parental allowance/part-time salary as after child 1.

Regardless of a second child: How would you assess the starting situation if the income rises from 3269€ to 4000€? Do you still see a bleak outlook for us?
(= increase from part-time to full-time salary)

We are aware of and agree with all your points. But why would the bank grant us twice as much credit?
We know some people with roughly the same salaries and new houses. They all have to calculate it very precisely. We can’t explain it any other way. But well – that is another topic.

About the house:

We had planned
completely new windows 20,000€
new bathroom and guest WC 20,000€
new floor coverings 8,000€
complete painting/plastering inside, possibly tearing down/moving 1-2 walls 10,000€
electrics 10,000€
kitchen 15,000€
possibly 10,000€ for additional furniture. But that doesn’t have to be.
We are still unsure about the room doors; we need to take a closer look again. Otherwise, we have also planned 8,000€ for these.
Almost all of this is to be done by ourselves, except for the bathrooms.

Forgot to mention in the initial post:
The house has a small holiday/separate apartment. There would be the possibility to rent this out additionally.

And Krippengeld from the moment the child goes to the daycare until the age of 3. I don’t know if that might only be the case in Bavaria.

As a Bavarian civil servant, I don’t know Krippengeld. What is that supposed to be?
Do you mean the Bavarian Betreuungsgeld?
However, a daycare spot in our community costs significantly more than the Betreuungsgeld, so I would reconsider that calculation.

We know some with roughly the same salaries and new houses. They must all plan very tightly. We can’t explain it otherwise. But well – that’s another topic.

How exactly do you know the salaries?
500€ more make the decisive difference. 500€ are over 200,000€ more available until retirement.
Besides, I can tell you that most home builders we know have received six-figure parental subsidies in some form. And then the conditions are quite different again.
And regarding the bank: Has that been properly checked or just said like that? For example, with friends, parental allowance was not recognized at all.

If I were you, I would carefully consider which renovations are really necessary. Are the bathrooms still okay? What about the electrical system?
Why replace the doors?
Why such an expensive kitchen?
The other items also seem somewhat underestimated to me.

As a Bavarian civil servant, I don’t know Krippengeld. What is that supposed to be?
Do you mean the Bavarian Betreuungsgeld?
However, a daycare spot in our community costs significantly more than the Betreuungsgeld, so I would reconsider that calculation.

Yes, the Betreuungsgeld. Here, the costs for the daycare spot are 160 €. I noted this above. And as mentioned, we do not want to include the subsidy in our considerations.

How do you know the salaries so exactly?
500€ more makes the crucial difference. 500€ means over 200,000€ more available until retirement.
Besides, I can tell you that most builders we know have received six-figure subsidies from their parents in some form. And then the conditions are quite different again.

That’s true, though. We have not taken subsidies from parents into account, nor do we expect any.

And regarding the bank: Has this been properly verified or just said? For example, with friends the parental allowance was not recognized at all.

Yes. Last year, during parental allowance receipt, we received concrete offers with financing plans. We also submitted all documents in advance.

If I were you, I would think carefully about which renovations are necessary. Are the bathrooms still okay? What about the electrics?
Why replace the doors?
Why such an expensive kitchen?
The other items also seem rather underestimated to me.

Yes. There will be another viewing where we want to carefully examine and consider all the work.