House purchase: Financing (with/without equity)

Hello everyone,

we (30/27, no children yet, wedding in November, net income 3,000/month) are planning our nest building.

Unfortunately, we have not saved any equity so far. For further family planning, however, moving out of our too small apartment is now inevitable.

My question therefore: Does it make sense to accept one of the numerous "purchase without equity" offers from various banks and financers? Or is it better to save the necessary equity over the next few years? What are the chances of putting together a decent financing at 35/40?

What are your experiences? What would you recommend?

Thanks in advance to everyone who takes the trouble to respond

Hello!

Basically, you should ask yourselves why you have no equity and whether it is possible to save equity in the future (despite child(ren)).

Financing without equity, yes it is possible, but you have to ask yourself if it makes sense. Ownership is a commitment and here and there you have to save up to do renovations etc. With €3000 net without children and equity, I also don't see you in a new house. Sorry, the financing doesn't match the income.

More likely in a condominium that is not so expensive and where you are "protected" in a "community".

You can calculate for yourselves. What are your fixed expenses so far (insurance, fees, phone, car costs, etc.), what do you spend on your living expenses? Then also consider that income or expenses will be higher with a house + child(ren). Do you also need money for new furniture?

Let's simply calculate financing €300,000, since you have no equity ([Kleines Reihenhäuschen bzw. günstige Gebrauchtimmobilie]).
Rate with 2.5% interest and 2% repayment = monthly €1,125

Loan installment: €1,125 (or possibly more if more loan or repayment is necessary)
Ancillary house costs: €400
Fixed expenses: ???
Living expenses with child: ???

Will it all fit?

The trend is clearly going towards 'better not' - I almost thought so, still thanks for the initial feedback

If we don’t happen to suddenly inherit a fortune in the next few days, we’ll continue with 'rent + strict saving' for now and see how things stand in +/- 5 years.

Does anyone have experience with this? Will the bank kick me out right away if I want to start financing at 35/40?
Do you have any tips for saving? Does a building savings contract still make sense? Acquaintances advise me against it (hardly any interest, etc.)

I agree with the previous speakers.

If I were you, I would look for an affordable condominium. Through the service charge, you are required to build reserves for all renovations around the property (everything that is common property like the roof, exterior walls, stairwell, ...). Additionally, you would still have to save to build reserves for everything that occurs within your own four walls.

From my point of view, that would be more manageable with your income than a house. Ultimately, I don't know your local real estate market either. Here in the Ruhr area, there are new (small!) terraced houses for around 200,000€ and quite nice and spacious condominiums – but only in a mid-level location – for 120,000€. Especially the latter should basically be financeable even without equity. However, you would need to post a bit more data (how long at the employer, probation period, income a bit more precisely, family planning completed? -> if not, how much income would be lost with a child and how many children do you want, ...) -> have a look at the corresponding threads here in the forum, there have already been similar questions.

Does anyone of you have experience with this? Will the bank throw me out immediately if I want to start financing at 35/40?
Do you have tips for saving? Does a building savings contract still make sense? Acquaintances advise me against it (hardly any interest, etc.)

From my own experience, no, they don’t throw you out at that age.
I would transfer a fixed amount by standing order to a 'good' instant access savings account each month right after the salary is credited and save that way.