Is the financing plan realistic?

Hello, I wanted to ask if my financing idea is somewhat suitable or realistic.

She: - 32 years old, employed teacher - Net income approx. €2,900 per month, minus own contribution for private health insurance €2,700 net - Savings approx. €25,000 in the overnight money account

He: - 31 years old, permanently employed at a large corporation - Net income approx. €2,100 per month, plus €40 advance payments going into a bank savings plan with 2.0%. - Vacation pay in May approx. €200 net and Christmas bonus in November approx. €1,700 net (both anchored in the collective agreement, I know, can be canceled at any time, currently included) - Salary increase of 1.6% in June 2016 already fixed in writing, more will probably follow, but I am not planning on that. - Also €25,000 in the overnight money account - Another €2,000 in the checking account which should always remain there as an emergency reserve - Bank savings plan currently €900 balance - approx. €5,000 in the form of gold and silver coins (intended for retirement)

Current warm rent €1,100

Ongoing costs such as mobile phone contract, gym, household contents insurance, liability insurance, car insurance, vehicle tax, internet, public broadcasting fee, foreign health insurance, legal protection insurance, trip cancellation insurance, private retirement provision amount to €650. The car is about 3 years old, was a new car back then and was paid in cash. Monthly savings rate to overnight money total €1,000. Then about €300 per month each to another account for vacation trips. The rest of the money goes to gasoline, lunch in the canteen, groceries, hygiene articles, cinema, sometimes going to a restaurant, etc. If anything is left over, it also goes into the overnight money account.

Now my consideration. There would be a semi-detached house with 142 sqm living space, 350 sqm plot, no basement directly from the builder for about €370,000 in a favorable location for us. Apparently everything included as far as I can judge: " We deliver for a fixed price: - sunny south-west plots - KfW-70 - house connection costs - land surveying - living area 141 m² - underfloor heating on all floors - electric shutters on the ground floor - tiling work - floor coverings - painting work - terrace - privacy elements - 1x car parking spaces - 1x garage - 1x garden house Bathroom incl: floor-level shower bathtub washbasin wall-hung WC heated towel rail - interior window sills made of Jura or agglomerate marble - all interior doors in various decors and high-quality handle fittings - interior stairs rubber-mounted, made of a solid beech wood construction - complete electrical equipment (at least 12 circuits) including: Schuko sockets (also terrace) burner points incl. switch (also terrace, entrance), telephone sockets TV sockets, doorbell, patch panel - outside water tap - high-quality windows with mushroom head locking - BLOWER DOOR TEST - front doors with three straps and triple locking - solid masonry construction (sand-lime brick) - exterior walls with high-quality thermal insulation composite system (WLG 035) - sound insulation according to DEGA recommendation (double shell house separating wall with 4cm gap, floating screed acoustically decoupled on impact sound insulation) - roof covering with high-quality Braas Harzer BIG tiles and approx. 24 cm thick, high-quality thermal insulation (WLG 035) - roof overhangs made of planed softwood with white color glaze - windows receive triple thermal insulation glazing with Ug = 0.70 W/mK or better. Warranty after handover: 5 years according to the Building Code"

Now my consideration: I calculate monthly incidental costs of €3/sqm = €360/month monthly saving for repairs of €1/sqm = €130/month loan repayment per month = €1,500 monthly saving for possible new purchases like broken washing machine, TÜV = €200/month saving for vacation = €400/month These would be, together with the €650 running costs per month, "expenses" of approx. €3,300.

Without considering special payments, €1,500 per month would remain. That seems way too much to me.

Then I ran the numbers with 12 months parental leave for my partner. She would then receive €1,800, i.e. €900/month less, but €190 child benefit would be added. Then we would have approx. €800 available per month. Now my questions. Should we save more equity and buy a home in about 2 years? Should we set the loan rate higher as long as no child is there, but that would only be for about 3-5 years. Even with a loan rate of €1,500 per year, we would have to pay for about 24 years to be debt free. Should the interest rate be fixed immediately for 20 years or rather only 10 years and then take out a new loan? Of course, the risk of interest rate increase exists.

Quickly: You have a very good net income, a civil servant position is always good as a secure job for financing, the cold rent will also be free. --> Personally, I would do it in your place and fix the interest rate for at least 20 years

+ Possible additional costs for better tiles, more sockets, etc.

And the entire purchase price is also subject to real estate transfer tax, 6% in Berlin (I believe), so about ~23,000 euros.

What about a kitchen and furniture?

Hi, yes, the real estate transfer tax is still due. Notary fees and land registry entry then as well, right? We want to clarify tiles and sockets, we want to visit a show home to get an initial overview. Furniture is an argument; as far as couch, bed and wardrobes are concerned, we have relatively new ones, but for a house it will of course not be enough. Kitchen would be another approx. €10,000, I am aware, it was missing in my list. So either an additional loan for the kitchen or pay from cash and then take out a higher total loan. Everything is so expensive.....:-(

Quickly: You have a very good net income, a civil servant position is always considered a secure job for financing, and the cold rent will also be free. --> Personally, if I were you, I would do it and fix the interest rate for at least 20 years

My partner is "only" an employee in Berlin, Berlin does not civil servant, but even as an employed teacher the job should be very secure, of course unfortunately not 100%. What we both still lack is an occupational disability insurance, we should probably both take one out beforehand, right?

BU is pretty much the most important insurance. Otherwise, things don’t look bad for you. Remember additional construction costs... if the kitchen was already forgotten, there are probably other additional construction costs missing as well. Outdoor area etc., for example.

You definitely shouldn’t take out another loan. Your 50,000 EUR might be enough for additional construction costs + kitchen + outdoor etc. (tight budget)... so assume 100% financing. Saving more is also difficult... since construction costs are happily rising. Saving 1000 EUR per month isn’t enough. If it’s significantly more... it’s more worthwhile. We haven’t even started building yet and prices have already gone up by 70,000 EUR.

Regards, Steffen