Is financing sensible/feasible?

Hello everyone,

we want to make our dream of owning a home come true and already have a property in sight. It is a five-year "old" house (prefabricated house, timber frame construction, Kfw 40, geothermal, solar thermal, fully basement, 2 full floors, 400 sqm plot, 140 sqm living space).

Purchase price: €410,000 incl. EBK ([value appraisal by the municipality])
Equity: €40,000

Minimal work still needs to be done on the house, which will be done as DIY.

Our monthly net incomes amount to €3,660 (He: 2000, She: 1660), with a child expected next year. That means the income will decrease over the next few years. Overtime, holiday and Christmas bonuses, as well as the 13th monthly salary, are not included. Furthermore, there will "sometime" be an inheritance (hopefully not soon) in the form of a house. This will be divided among three children.

We now have a financing offer, which is as follows:

[*]€175,000 over 10 years; repayment 2.16%; interest 1.85%
[*]€230,000 over 15 years; repayment 1%; interest 1.95%
[*]Monthly rate of €1,150.

Our further calculations (monthly) are as follows:

[*]€800 things to live on (food, drinks, etc.)
[*]€400 insurances
[*]€250 additional costs
[*]€160 dog

= approx. €1,600

That would result in a total monthly burden of approx. €2,750.

Now my question to the community is whether our calculations are accurate, or if we have calculated utopian (too much, too little)? In addition, we would be interested in what you think of the financing and whether you would take this risk or rather advise against it?!

Thank you in advance for your opinions, advice, and tips.

Regards

bmew_

Personally, a remaining debt of 133,000 euros in 10 years and 189,000 euros in 15 years would be too risky for me. I would rather invest for 20 years with slightly worse interest conditions and then be able to sleep peacefully. If one actually inherits, I would use this to make special repayments or pay off the loan. If the interest rates are better in 10 years, simply terminate the whole thing and refinance.

Is this a foreclosure?
Today's KFW40? (unclear if this is relevant)
410 k€ ... your equity just about covers the incidental purchase costs.
410 k€ with 3660 net - what will it be after the child - net, that is?
Incidentals will increase depending on the house. A child costs money (depending on attitude towards life, a lot or just so-so)
What do you do for work? Not out of curiosity - just that civil servants or public service employees have a bit more predictability.
The offers from the bank are good - purely in terms of the interest rate. You just already have a residual debt mountain.

A few thoughts from my side:
Have the additional acquisition costs already been included? Even "small things" that need to be done cost money!

What does it mean that the income will decrease for the "next few years"?
With one year of parental allowance and then a >50% position, that might work, but with two years at home and splitting the parental allowance, it will already be very tight; with three or more years, your wife will have a big zero.

You should also reconsider your expense list:
What is included in the 800€?
Additional costs of 250€ will be tight, better to add a bit more, even if it is supposed to be "KFW 40".
What about a car? Does one exist or not? Even if not, you also need to get from A to B sometimes.
When a child is there, expenses will increase exorbitantly.
Don’t forget things like vacations, clothing, gifts...

Long story short:
Even if you get financing at the current interest rates, personally I would find both the total financing amount and the installment way too high for your income, especially if you are planning to have children.

How old are you? If it is THE house in a good location (urban area or similar), then I would make sure to fix the loans for 20 years. Or longer. How secure are your jobs? Public service? Is the income still increasing? I would completely exclude inheritance; you should not count on something like that. It can quickly be gone for care costs.

Have a financing offer here now

From a bank? Why not a KfW and the rest fixed for 20 years? I am a bit worried that the loan amount is too high for you (that doesn't make you bad people, it just is). I would leave it. A house that is divided among 3 children is probably worthless. Unless it is a multi-family house in Munich.