Maximum loan amount based on our monthly burden

Hello.

We would really appreciate your advice.

Over the last few months, we have been looking at how high our monthly expenses are. Now the question for us is how high the loan we take out may be. We will also go to a broker, but I would be interested in your assessment beforehand. That way I can talk to him better.
About our situation: My wife has a net salary of about 4,800 euros. A complete expense/income statement is attached below. I myself had to take care of our parents in recent years and had no income. Since this month, I am fully available again. However, it will probably be the case that after the birth of our child, because of my wife's high income, I will take care of our child and go on parental leave. My salary would normally be around 1,400 euros net, so much less than my wife's.
We are married and expecting a baby. I will take 10 months of parental leave, and my wife will return to work 2 months after the birth. We would prefer it the other way around, but then taking out the loan wouldn’t work, and currently we have the opportunity to buy a very nice plot of land with the subsequent construction of a single-family house.

The equity that we would specify for the construction financing amounts to 170,000 euros. Notary and land registry costs, broker commission, 15,000 euros in reserve, property transfer tax, reserves for rent during the construction period, and furnishing for the house have already been deducted.

I would calculate a "muscle mortgage" at an additional 9,000 euros for painting and laying parquet flooring.

What do you think is the maximum loan amount we could obtain? Of course, we would be very happy to receive any further advice regarding our individual situation.

1. Expense Calculation

a) Total costs + reserves 3,629.40 €
aa) monthly costs 2,353.44 €
1x 250,000 euro term life insurance 12.00 €
2x supplementary insurance chief physician treatment 58.79 €
1x dental supplementary insurance 36.58 €
1x accident insurance 18.10 €
1x 2,500 euro disability insurance coverage 122.94 €
2x mobile phone basic fee 25.00 €
DSL 27.07 €
Broadcast license fee (GEZ) 17.50 €
Capital life insurance payout on 01.07.2027 of 58,942.84 euro 133.65 €
Building savings contract 45.00 €
Miscellaneous (gasoline, car maintenance, groceries/shopping/clothing/luxury/gifts/restaurant/cinema) 1,239.97 €
Child up to 18 years incl. daycare 616.84 €
bb) monthly reserves 718.54 €
Winter + summer vacation 314.13 €
Trip cancellation insurance 6.58 €
Foreign health insurance 1.65 €
Amazon Prime membership 5.75 €
Freesat TV subscription 1.83 €
Legal expenses insurance 24.92 €
Private liability insurance 7.50 €
Household insurance at the house 8.72 €
Medical association/academy fee 8.00 €
Car 1
Motor vehicle liability insurance + comprehensive 34.46 €
Vehicle tax 21.42 €
Technical inspection & exhaust test 5.12 €
New car purchase (calculated every 8 years purchase price 12,000 (Fiat Punto almost new, sale old 3,500) 88.54 €
Car 2
Motor vehicle liability insurance + comprehensive 46.11 €
Vehicle tax 9.00 €
Technical inspection & exhaust test 5.12 €
New car purchase (calculated every 8 years purchase price 18,450 (Opel Meriva almost new), sale old 6,000) 129.69 €

b) Total house maintenance costs 557.42 €
Maintenance + new furniture + house modernization 117.60 €
Property tax B rate 660 = approx. 1,000 euro/year? 83.33 €
Wastewater fee (3.21 euro/cbm) 13.38 €
Stormwater drainage fee annually 0.90 euro/m2 built-up or paved area (213m2) 15.98 €
Organic waste disposal 60l 7.76 €
Residual waste disposal 100l (every 2 weeks) 10.06 €
Residential building insurance 20.33 €
Current electricity costs (97 euros) 138.62 €
Street cleaning; winter maintenance (with 18m plot side) 2.70 €
Heating and hot water costs 97.71 €
Fire extinguisher maintenance 1.04 €
Chimney sweep 4.17 €
10 smoke detectors every 10 years 20.00 €
1 heat detector every 10 years 3.50 €
CO2 detector 0.37 €
Gas detector 0.67 €
Ventilation system maintenance 5.21 €
Ventilation system filter 6.67 €
Ventilation system cleaning 8.33 €

2. Total net income 5,470.39 €
Salary 1 average net - €
Salary 2 average net 4,819.58 €
Condominium rent/profit 367.81 €
Child benefit (once the baby is here) 193.00 €
Child benefit allowance employer/collective agreement (once the baby is here) 90.00 €

Income 5,470.39 €
Expenses 3,629.40 €
Possible monthly burden from loan 1,841.00 €

First of all, I have to give great praise, such a detailed breakdown is rarely seen.

Without checking whether it is complete, I will now simply assume a "surplus" of €1,840. What spontaneously comes to mind are costs for possible insurance for credit protection (e.g. increase in term life insurance) and costs incurred by the child. Especially the second one cannot be insignificant.

We have a full repayment loan of over €400,000 and 30 years, and pay about €1,500 monthly. I would see you comfortably in the same range, but it depends on your risk tolerance, possibly a bit more could also be possible. What is always important to me is a plan until the full repayment of the loan. With today's low interest rates, I would not agree to a term where in the end a large part of the loan remains.

Thank you for your assessment. We have estimated the costs for the child and they are already included in the list. Increasing the term life insurance slightly is a good idea. Thank you

You have calculated everything perfectly. Financially, I see no problems. However, if I were in your position, I would consider postponing the house construction by 2-3 years. That way, your wife would have the freedom to take parental leave for a longer period first and then possibly work part-time for 1-2 years. You really have to want to give up the time with the baby just because of the darn money, but your wife does not want that. You could buy the plot of land now; possibly the equity capital might even be enough for that.

You have calculated everything perfectly. Financially, I see no problems. But if I were in your position, I would consider postponing the house construction by 2-3 years. This way, your wife would have the freedom to take parental leave for a longer period first and then maybe work part-time for 1-2 years. To sacrifice the time with the baby just because of that damn money, you really have to want to do that, but your wife doesn’t. You could already buy the plot of land now; possibly your equity is even sufficient for that.

We have also thought about building later. However, my wife has fallen so deeply in love with the plot currently available for purchase that she would bite the bullet and not take parental leave. And the plot unfortunately can only be acquired if construction begins by 31.03.18. That’s why the parental leave problem arises for us. With my salary (I also still have to find a job), it would certainly be difficult to find a bank that grants a loan for a house. As far as I know, parental allowance is not counted as income by banks. And it is capped as well, so my wife would only get 1,800 euros in parental allowance. Therefore, things are a bit more complicated for us. Does anyone else have an assessment of the maximum reasonable loan amount?

Respect! Great numbers!

But keep in mind: Prime is getting more expensive!

Jokes aside: I would always calculate with rounded-up numbers as a rule. Also monthly. This doesn't change your good situation, but you then have a better overview and have already factored in 1-2 increases

Brief regards