Use Riester and family support in a targeted manner

Hello dear ones,

first of all, I want to mention that I did not intend to start looking for real estate in the next two years, but our situation has currently changed. We are expecting twins and would thus soon have 3 children.

To begin with: I have not saved anything so far, my wife has saved about 10k and while I took out a Wohnriester "zuhause direkt15" with LBS 3 years ago, my wife has a regular Riester contract. She does not know how much she has paid into it. She no longer receives the allowances either because I get the child benefit. So the contract is probably no longer optimal for her, but that is another matter.

A few key data points:
Every year, building plots are allocated here based on a points system. Families with 3 children have very good chances of getting a plot for 100-140k.

After the birth + taking into account the child benefit, I would earn just under 6,000 net.

The interest rates are currently between 3-4%? How can Wohnriester be used without equity, maybe also using the money paid into my wife’s Riester? Does that make sense with the current interest rate situation? In a few months, there is also supposed to be new KfW support for families, which is meant to support families with a gross income of 60k + 10 for each additional child.

Should we give up on our house building wishes or can a new build be useful for us as a family, taking energy efficiency into account to get better conditions from KfW? If a property is feasible, what would be the maximum amount possible with my income without financially overburdening myself?

1. Without significant equity, it is currently difficult to impossible to obtain financing. 2. I would never include child benefit in my available net income because you need that money for the children. 3. With just under 5,200 net, it might still work, but it doesn't have to. That also depends on what kind of house comes with the land. The mentioned subsidy does not refer to the annual gross income but to the taxable income. 5,250 net almost requires more than 10,000 gross, so it should still be tight, shouldn't it?

With the income, you could really make something happen, but where has all the money gone so far? If you are already spending over €5000 net without the twins, it won’t get any better with them. And without equity, it’s just madness. With the budget, you quickly get into the range of €600k (€140k land, €400k house (a good 130 sqm at €3000 each), ancillary construction costs, outdoor facilities), which then corresponds to foreign capital. That alone amounts to €1750 per month just for interest at 3.5%. Plus repayment, and we’re talking about installments beyond €2500. Can you afford that?

First of all, make a list of all the income and expenses you have during the year. It’s best if you also start a household budget book right away

I would basically agree with what has been said so far, that it is currently becoming difficult.

But this here:

2. I would never include child benefit in my disposable net income, because you need the money for the children.

I do not want to leave it standing like that without reservation. Depending on the age of the children, you can of course include it, and the bank will also include it. After all, the bank will also deduct a flat rate (by the way, higher than the child benefit) for each child.

I was also pessimistic, but the new home ownership subsidy is supposed to come in April, which is specifically intended for families without equity. That means 60k gross income with 1 child and with two more 80k are eligible. But probably still premature without knowing the exact conditions how feasible the whole thing is… we would have the parents-in-law who would provide us with the equity, but I actually want to act without outside help…

Means 60k gross income with 1 child with two more 80k are eligible.

So you don’t, with 5250 EUR net without child benefits... So how is that supposed to work?

Yes, if the parents-in-law could help out (it can also work via a private loan), it can work. Depending on how much...
But yes, it really depends on your household budget. Why haven’t you built up any equity until now?