Is income problematic for financing a townhouse?

Hello everyone,

my girlfriend and I (23 and 24) are considering buying a townhouse in Hamburg. The corresponding project is already planned and the sale of the houses will start soon, completion will be early to mid-2016. The purchase price is about €300,000 (no commission).

The problematic part is that my girlfriend will still be studying until about mid-2016 and only then will a second income come in. In addition, we would have at most equity for the incidental purchase costs and would have to finance fully.

Currently we pay about €800 rent, but would spend a higher monthly amount for a financing, especially when the second salary comes in. Net income is currently about €2,000, with the second salary it would rise to about €3,000. We are not under time pressure regarding the term, the loan is to be paid off by retirement. We are expecting an inheritance of about €100,000 in the (hopefully still far-off) future, which should be used as a special repayment. As already mentioned, hopefully that will still take a long time, so it should not yet be planned.

My question now is: Is it even realistic to undertake such a project? And is it possible, for example, to pay a lower monthly amount in the first year and then increase it?

I have an appointment at the bank on Friday, but would like to know in advance whether this is just a pipe dream or at least somewhat realistic.

If you get financing for 300K€ with an initial repayment of 1% and maybe an interest rate of 2.5%, that would be a monthly burden of 875€. However, all additional housing costs must be added. The total burden would thus be at least around 1200-1300€, with a tendency to rise, since with today's interest rates you should repay around 2%. In addition, 300K€ probably won't be enough. Why do you want to take on such a burden at 23+24 already?

And 1% and no equity hardly any bank agrees to. And in your own interest, you should agree on at least 2%. But if you can't afford that, don't do it.

My question now is: Is it even realistic to undertake such a project? And is it possible, for example, to pay a lower monthly amount in the first year and then increase it? I have an appointment at the bank on Friday, but I would like to know in advance whether it is just a pipe dream or at least somewhat realistic.

Something like this is quite common and feasible. However, the credit limit must always fit the current situation. Future salary increases / new jobs are usually not taken into account because they are unpredictable. So, are 2000€ enough for a 300k€ loan and a household of 2 people? I think not!

The problematic part is that my girlfriend will be studying until about mid-2016 and only then will there be a second income.

For the bank, there is one income - no more and no less. Except: your girlfriend already has an employment contract after her studies. However, you should rather ask yourselves whether you want to commit long-term to a property. In young years, people often work their way up by changing jobs, which is often only possible by changing companies. Also, a job after studying could mean a different city - nowadays you have to be flexible. You are not with a house. Then every euro has to go into the mortgage payment, no 50 € here for food and fun pool there if you have to budget tightly. I still assume only one income. Does your girlfriend have to repay Bafög, what does the job market look like? Do you only get internships after studying? Possibly a car has to be bought because the new job is not accessible by public transport? I know some who receive Hartz4 after studying...

So: the question is not only whether you are capable of all this responsibility, but also whether you want it now - instead of spending the weekend with friends at the Baltic Sea, you rake the garden then...

We are (hopefully still far in the future) expecting an inheritance of about €100,000,

The money might very quickly have to be spent on care of the owner -> you cannot grasp the money, the money does not exist - no one knows what will happen in 20 years.

The corresponding project is already planned and the sale of the houses will start soon, completion will be early to mid 2016. The purchase price is about €300,000 (no commission).

Where is that in Hamburg???? If you like, send me the link to the listing via PM (private message). Let's see if the listing does not already include hidden costs.

Greetings Yvonne

Yes, after graduation, you don’t necessarily get a job right away. I also initially received Hartz IV, and then a few years later the pension. Which you can count on one finger with my contribution periods... For the bank, only the existing income counts, and only if the job is permanent. They certainly won’t give a 300k euro loan with a 2000 euro income for 2 people. Since the girlfriend has no income but is included in the loan contract, that one income is also the family income. And no equity... the situation was already borderline for us, but with 40% more income. We also didn’t have any equity, apart from the few euros for incidental purchase costs – that was just under 7000 euros. But I also think that in the “young years” you should wait a bit. Both regarding the job situation and the relationship (will it still last in 10 years?). Just as a precaution. And I belong to those who already desperately wanted their own house in their early 20s ;)