Madness or feasible? :-)

Hello,

we are considering a house, but despite everything, I am still "shaking in my boots" about the purchase price. I would like to use your experience regarding the financing.

I (32) / she (29) & 1 child (10 months old) - no further plans.

She is currently on parental leave. After parental leave, part-time work.

Together we have a net income of €4200 including child benefit.

I have calculated very conservatively here. I receive a monthly bonus from further training, otherwise we would be at €4600 net. With the annual bonus, €5200 net/month.

Therefore, I would definitely want to structure the financing towards generous special repayments.

After deducting all fixed costs (excluding rent) from the €4000/month, there is currently €2600 free capital every month. My savings rate this year so far is €1200 per month. Last year it was much higher since there was no baby yet. Fixed costs may reduce future daycare costs of €250 (the legal situation changes in Hesse from 2019). I have also calculated a flat €150 insurance cost regarding future baby (still under consultation) & term life insurance. Possibly too much? I already have disability insurance and it is factored in.

Equity - approx. €100,000 (beyond that remains as a buffer -> not intended for the house!!)
House purchase including incidental costs: approx. €450,000 - whereby an appraiser will take another look, possibly negotiable.

We currently pay cold rent of €780 and €220 ancillary costs - 130 m². In terms of comfort, we would not have to move out, but it is nothing of our own. The house is similarly sized.

How do you assess my situation?

I want to plan it so that we can definitely manage the loan with just one income. Even if it becomes uncomfortable. I still find it hard to estimate the costs for the child. At the baby age, that is not yet a factor.

Thank you very much!

You can get a €340,000 loan for €1100-1200 per month. It should be no problem.

The house is very affordable and the earnings are decent. I don't see any problem at all, go for it!

Thank you for the feedback. The only thing that dampens the joy is the possibly long repayment period and the interest incurred.

I calculated this using the Immoscout24 calculator. With a 20-year fixed interest rate, I pay about €100,000 in interest, with 2.5% repayment (~€1300 / month), and then there are still €140,000 outstanding.

That is quite a statement. By then, the house will have already cost me €550,000, without the reserves for repairs. Or am I looking at this incorrectly?

Or am I looking at this wrong?

Yes! Whether your calculation is correct can only be seen if you know the interest rate, but if you cannot earn the money (450000), you have to borrow it. And there is also the offer here: borrow nothing and continue to live in rent where you are. 20 years is not long. You really have to look at this somewhat relaxed and not pity yourself where there is nothing to pity. There are far more people who cannot complete a financing so relaxed.

With 1000€ rent including utilities for 130m² and if the 130m² are properly and nicely livable, I probably wouldn’t move out at all.

If you skim over it roughly, you see that correctly.