Loan of EUR 500,000 - possible with monthly income?

Hello,

after we now have all the numbers on the table, our project is as follows:

Land: available (value TEUR 170)

Construction costs for a 1.5-story detached house turnkey: TEUR 380

2 single garages with foundation: TEUR 30

Additional construction costs (incl. demolition of existing property) TEUR 101

Outdoor facilities (incl. retaining walls and leveling) TEUR 57

Total costs: TEUR 568

- Equity TEUR 70

Financing volume: TEUR 498

We also still have a debt-free condominium (approx. TEUR 150 value), from which we should receive a monthly rent of estimated EUR 500 - 600.

Together, we have a net salary of approx. EUR 5,200.00 per month, including the rent, so EUR 5,700.00 - EUR 5,800.00 available.

We are a two-person household.

If one salary is lost (planned child), there would still be an income of EUR 3,000.00 (changed tax class and child allowance already considered) + rent, so about EUR 3,500.00 available.

Do you think that under these conditions a financing of this size is feasible without sleepless nights?

Regards

If the person taking parental leave goes back to working at least 50%, I consider it feasible but tight. However, I don't understand why you don't sell your apartment, then it would certainly be much more relaxed. Just imagine the scenario if you get a hoarder as a tenant!? No rent, apartment trashed, etc.

I can only agree with that. Due to the low interest rates, real estate prices have risen so much that your apartment will certainly sell attractively. Even though it is a very high income and you also got a property without any debt, I would have sleepless nights with 500k.

However, I don't understand why you don't sell your apartment; it would certainly be much more relaxed. Just consider the case if you get a hoarder as a tenant!? No rent, apartment destroyed, etc.

At the moment, it is cost-neutral for us whether we sell the apartment (lower loan burden is offset by loss of rent). Taking into account the future expected rent increases, selling the apartment does not seem very sensible to us.

We plan to rent the apartment to a large company - as living space for employees temporarily living here - therefore we expect a high security of the rental contract.

At the moment, it is cost-neutral for us whether we sell the apartment (the lower loan burden balances out with the loss of rental income). Considering the expected rent increases in the future, selling the apartment does not seem very sensible to us. We plan to rent the apartment to a large company - as living space for employees who live here temporarily - therefore, we expect a high security of the rental contract.

And especially then you don't know who is living there!! Or does the large company give you a rent guarantee or something similar? I do not see a sale as cost-neutral either, because by selling you would be in a position to get better interest rates from the bank. Now almost fully financed--->>> then in the range of promotional conditions. Furthermore, I would estimate a monthly payment of at least 2300-2700 euros for a loan of 500K. To be able to sleep peacefully, rather 2700. What is left to live on then?

Together we come to a net salary of about EUR 5,200.00 per month, including rent there would therefore be EUR 5,700.00 - EUR 5,800.00 available.

We are a two-person household.

If one salary were to drop out (planned child), there would still be an income of EUR 3,000.00 (changed tax class and child allowance already taken into account) + rent, so about EUR 3,500.00 available.

Do you think that under these conditions financing in this size is possible without sleepless nights?

Doc Schnaggls

From my point of view - short and sweet: no.

The bank might even give you the loan, as they often only look at the current situation.
But if I look at the target situation (EUR 3,500 per month - possibly only temporarily), this will not work.

Generally, it is assumed that one must plan for about 5% annuity to be finished with the financing after about 30 years.

Take the EUR 500,000 at 5%, you come to a monthly burden of just under EUR 2,100.
The 5% are of course also dependent on your age and desired term (> 40 years smaller burden, 25 years higher burden).

That leaves about EUR 1,400 all in for a family of three. The additional costs for the house are not included here yet.
With this you have to cover: living expenses (food, clothes, furniture, etc.), costs for the child, insurance, car(s) including fuel, electricity, etc.

At least we, with a similar financial starting position and a possible burden of EUR 1,600, pulled the emergency brake, since we already had "sleepless nights" before signing the loan.

The suggestion from b0012sm with the condominium is at least worth considering. You are currently probably living in it. A low-interest variable loan is suitable here for subsequent sale, which can be redeemed directly with the sale.