How is a 400k loan financible without equity? Net equity at €4,500

I just had another conference call today with a developer who
- had to fire the shell builder and is now going to court
- had to replace the roofer
- has a landscaper who doesn’t even show up on the construction site
==> Cost increase of about 10% + a delay of 1 year

It can happen that fast. And my client is a company that has been in business for almost 100 years and has built nearly 17,000 apartments by now. If even a professional can get into such trouble, things can go very quickly for a small builder. Then you have to have a little cushion to fall back on.

our income is 4,500€ net. With a child in the future, it won’t be less, because we continuously increase our salaries. We always want to have at least 1,000€ available at the end of the month for saving or partly for spending. Therefore, the pain threshold for the monthly rate is 1,250€
[..]
no one talks about finances. Who can still afford a house then? What is your assessment?

Civil servant or public sector? Supposed securities are currently and will surely be tested even more in the future. Parental allowance is at a maximum of 67% on the base salary, without extras like bonus or 13th month salary. Are these salary grade increases compensating for this loss of income during the first year of life in parallel?? And possibly daycare fees for 2 years after that (minus the tax component of childcare costs)?

1,000€ additional savings rate on 4,500€ would be 22.2%. That would be more than decent and well above average. Have you just reached the salary bracket? Otherwise, zero equity is somewhat surprising. If you want to realize it this way, you should have already set aside 2,250€ this month. Christmas bonus + this savings rate + desired payment until the end of the year, and you’re already at 20,000€.

No risk, no fun. These financings are risky, but quite common in other countries. So it works. During the so-called financial crisis 2008/2009, many such loans defaulted.

Where the word financial crisis was mentioned – are these loans still that easy to get nowadays? The reports in the press indicate a certain increased caution by the banks.

Where the word financial crisis was mentioned - can you still get these loans so easily currently?

Yes, currently one is once again invited to "overstretch" themselves.

Yes, at the moment there is again an invitation to "overstretch oneself."

Although it is only my assumption, with the ECB's interest rate policy, banks should currently be glad if they can get rid of their money elsewhere instead of paying negative interest rates for it.

Interesting perspective. I couldn't go on vacation at a hotel every year and have never looked at it that way. Otherwise: For an 80,000 property, the house is too expensive, then it would fit again.

I don't understand the connection? Our property cost €60,000. Would we then only be allowed to build a €150,000 house on it?