How much house can we afford?

Hello
My wife and I have been parents for 4 months now, and we are starting to notice that our small rental apartment is becoming cramped.
Our plan was actually to consider buying a house in 3-4 years.
Now we are wondering whether we should rent something again, which of course doesn’t really fit with our limited equity for a future purchase.
Or whether we can already pursue the dream of owning a house now.
A brief introduction about us
Me, 29 years old, 12 years of permanent employment.
€2100 net.
Wife: currently on parental allowance €1000, from August 2014 about €900 part-time in the public sector.
I’m not including child benefit here.
We currently have €13,000-14,000 in capital.
According to a consultation at a building society bank, the bank would lend us about €180,000.
However, the Wohnriester for wife and child was of course included in that, and the value of the house must be sufficient.
We are looking for an older house where one can freely develop it. Since I am quite handy, much work would naturally be done by myself.
What do you think, would it make sense to look for our “dream house” now, or rather move into the next rental apartment to continue saving capital?
Since the conversation at the bank, I have been completely overwhelmed. What do you think about Wohnriester for wife and child?
I personally am equipped with a good life insurance and do not want to have more monthly financial burdens.
Greetings from NRW
Daniel
I look forward to your answers and advice.

Hello

The first question that arises for me is how do you manage with the money? I estimate that before the birth the net income was about €3,500, if you have only saved "14,000" equity, it is very tight. Either you have saved too little and/or lived well. A house, especially an older one, means additional costs. It is not done by just buying. You also need materials which cost money.

Additionally, child care fees are deducted from your money. This means that the money which is now less will be reduced even further.

In your situation, I would not get a Wohnriester either. If you build the property on the Riester subsidy, the idea has missed the mark. Certainly sensible as retirement provision, but not as construction financing.

Regarding the €180,000. This would be financeable without a broker, since you do not have the equity. With a 15-year fixed interest rate and assumed 4.5% + 2% repayment, that means about €975 / month + household money of about 300 = 1275 purely for the financing.

Hello,
Our limited capital comes together from various sources. We have lived well for a long time, and my wife was only able to work part-time until shortly before the pregnancy.
Childcare is already included in my wife's net income, so no information on child benefits and childcare allowance is provided.
At the moment, we are saving just under 800 euros a month for our washing machine costing 500 euros, however, 500 euros are going towards a project that will be finished soon.
So 1250 euros would already be possible.
My problem is currently the 66 sqm.
But if I rent an apartment now, then easily another 3-4000 euros will be gone for renovations, etc. That is why this is being considered. Otherwise, we would have a good amount of equity together in 3-4 years.
Everything is a bit awkward.

Hello,

According to a consultation at a construction bank, the bank would lend us about 180,000 euros.
We are rather looking for an older house where one can develop freely. Since I am quite handy, much of it would of course be done by myself.

Where should this house be located; or where do you want to live?

Rhenish greetings

So we don't have a specific property yet and are leaning between Duisburg/Oberhausen, of course the offer just has to fit.

So, we don't have an exact property yet and are leaning between Duisburg/Oberhausen, of course the offer simply has to fit.

What kind of project do you have that is about to be completed where so much money is going?

I can't assess the situation in Duisburg / Oberhausen. But I know that prices there are probably not as horrendous as in Rhein-Main or Munich.

I would advise you, for example, to also involve an agent who can calculate a financing plan for you. They also have other banks available.

With the current interest rate level, go for at least 15 years and do not use building savings contracts but rather incorporate a high repayment rate!

And you should set up a detailed financial plan after the birth. I see it critically here how the money is being handled. And owning property really costs a lot of money.