What can we finance?

Hello,

after having the topic of owning a home on our minds for several years, we have decided to take the plunge. Since we moved from the far north to Munich a few years ago, we initially had to get used to the construction costs here. The shock is over, and prices haven’t really gotten any better in recent years, so “now or never.”

Since we are both quite security-conscious, however, we are asking ourselves what we can realistically afford. Currently, we have a property south/southwest of Munich in sight for which we would have to reckon with about €800,000 (+/- 25,000). But perhaps a bit about us:
- 30 + 32
- Income: €3,400 + €4,500/month (without Christmas, holiday bonuses), full-time 40h
- Children planned in 2–4 years
- Equity: €160,000 / of which €20,000 should remain as a buffer
- Condominium: €115,000 value with a remaining debt of €65,000 – rented & self-sustaining
- monthly savings rate combined: approx. €4,500 (+/- €200)

Expenses:
- current cold rent: €810 + €180 utilities
- leasing: €300/month (incl. insurance and taxes)
- fuel: €150/month
- food: €500/month
- fun: €400/month
- travel: €800/month
- miscellaneous: €300/month

When there are children, a salary of €3,400 will reduce to about €2,100 (parental leave, of course, less). From your point of view, is €800,000 feasible?

We already have financing commitments from several banks but somehow one still gets quite nervous with these sums. Especially since no money comes from the family but we have earned everything ourselves and will have to continue to do so in the future.

If those are children, a salary of €3400 will be reduced to about €2100 (parental leave is of course less). Do you consider the €800,000 feasible?

Feasible yes (otherwise several banks would not offer the financing), if you both work your whole lives. The question is whether you want to pay the bank over €3,000 every month or if there are alternatives such as a condominium, a bit more commuting. Your lifestyle will also be restricted, especially if there is a child. You have to decide what a house is worth to you.

Boh..that is an amount one must be aware of that it is not something to pay off quickly. Here you can only hope that the property prices in MUC continue to rise or at least not collapse and that you sell at a profit in 20 years. Because paying a monthly rate of €3000 for 30 years, I would not be up for that.

That would be too intense for me as well. The income is great... but the equity should be significantly higher. 50% is certainly a good value for peace of mind at this volume. We have 1.2 million with about 700k equity. That fits well together and the loan is manageable. The value of the house is always significantly higher than the equity as well. So there is virtually no risk.

How much of your equity would you have to put into acquisition side costs? Broker, real estate transfer tax? Is there anything left over so that at least one stone of your property belongs to you? I paid 14.5% side costs (in TH), which means that for you (if the numbers are the same and with €20k as a buffer) there would only be €24k left for the property, thus 3%. Harakiri... Unfortunately, you are not entitled to any subsidies (Baukindergeld) either.

How much of your equity would you have to put into incidental acquisition costs? Broker, real estate transfer tax? Is there anything left so that at least one stone of your property belongs to you? I have paid 14.5% incidental costs (in TH), i.e. with you then (if the numbers are also like that and 20k€ as a buffer) only 24k€ remain for the property, thus only 3%. Harakiri... Unfortunately, you are also not entitled to any subsidies (Baukindergeld).

That is a good objection. Real estate transfer tax, notary, and land registry are about 6% of the purchase price in BY. Broker fees are not capped but I have seen that in the MUC area it is 3.57% including VAT.

If the property now costs 800k€, then 80k€ are gone already. So only 60k€ remain minus buffer. That is then a 92.5% financing.

If it really is like that and there are additional incidental acquisition costs on top of the 800k€, then I think it is too little equity to finance healthily.

And you do not have children yet. Setting aside the parental leave and temporarily lower income issue, MUC is not cheap when it comes to childcare.