What do you think about the financing? + I have a huge problem

Hello,

we (Mom+Dad+1 child) are planning to fulfill our dream of owning a home.
We have now started looking for a plot + house offer + financing from the house bank etc...
Now I am faced with a bunch of questions that are partially answered on the internet, but sometimes contradict each other...

Now I would like to get opinions on the whole financing.

Dad net income: 1800 EUR
Mom net income: 800 EUR
Child 2.5 years

Property price 266,000 EUR
Incidental acquisition costs 2,500 EUR
Other costs 10,000 EUR
Total expenditure 278,500 EUR

Total expenditure 278,500 EUR
- Equity 40,500 EUR
= Financing requirement 238,000 EUR
+ Payment discounts 0 EUR
= Financing volume 238,000 EUR

Financing funds	Interest rate %	Disbursement %	Repayment / Type	Interest rate commitment	Effective annual interest rate %	Financing funds
Kfw 70	1.400	100,000	2.798 %	until 30.06.2023	1.41	50,000.00 EUR
Construction loan Labo	0.500	100,000	1.000 %	until 01.07.2028	0.65	40,000.00 EUR
Interest subsidy Labo	2.350	100,000	1.000 %	until 01.07.2028	2.46	70,000.00 EUR
Fuchs residential pension, long, Dad	2.550	100,000	Building savings contract	until allocation	2.62	40,000.00 EUR
Fuchs residential pension, long, Mom	2.550	100,000	Building savings contract	until allocation	2.63	38,000.00 EUR
Interest rate hedging KfW	2.250	100,000	Building savings contract	total term	2.58	36,000.00 EUR
Interest rate hedging interest subsidy Labo	2.950	100,000	Building savings contract	total term	3.20	55,000.00 EUR

The total effective interest rate of all financing before tax is 2.79 %
The total effective interest rate of all financing after tax is 2.32 %

This results in monthly installments of approx. 900 EUR.

What do you think about it? Is the basis of the financing OK?

Then to my problem :(

The offer for the house as we imagine it exceeds the entire financing by 25,000 EUR, so the financing requirement would be approx. 265,000 EUR.

Now my bank advisor said that this would not work and that we would rise to a monthly rate of approx. 1,100 EUR. So that the whole thing would not be financially viable for us.
Is he right? Would there be no other/cheaper solution?

I know this is a lot of input but opinions on the whole thing would be very important to me because we are about to call the whole thing off.

I thank everyone who can help me!

Best regards mi casa

With the income, I would be more than cautious with both a €245,000 and a €265,000 loan. The acquisition incidental costs also seem very low to me. What about the acquisition tax? How much remaining debt is still open after how many years? Unfortunately, the copied table is a bit broken, but I did read something about the year 2080 in between.

In addition to paying off the house, there are also the incidental housing costs. With €2600 / €2784 (incl. child benefit). - €900 to the bank - €400 incidental housing costs - at least €150 reserves for the house

That leaves about €1300 for the rest. But the whole rest of life has to be covered from that. It doesn’t stop at food and drink. But that depends on too many factors. Besides housing costs alone, we have fixed costs of over €1,000 (phone, childcare, insurance, train, parking, etc. pp.). That would leave €300, and not yet eaten, drunk, fueled, or bought clothes.

I don’t think much of the financing, at least regarding income in relation to the loan. And I am sure that after the fixed interest period ends, you will end up with a very high remaining debt. With a mini repayment rate, it may be feasible for you today, but that only pays interest, so the house is hardly paid off. You might as well rent, because it doesn’t matter if the house belongs to your landlord or the bank.

Now my bank advisor said that it wouldn't work like that and we would increase to a monthly rate of about 1100 EUR. So that the whole thing would not be financially bearable for us. Is he right? Would there be no other/cheaper solution?

Do you want a beautified calculation, encouragement from the bank advisor, and worries every month about how you can pay this and that? Additional equipment costs will come anyway, that's the law, and does the kitchen already count, as well as moving costs, new lamps, etc.? For that, you then need reserves that you don't have.

Just keep your hands off borrowing money that you can't pay back... I find the bank advisor's advice fair towards you!

I also find it quite tight with that income – and would think it over carefully. How much is your current rent excluding utilities? And how many euros do you currently have left each month without having to save uncomfortably from your basic expenses?

I wouldn't finance your lower amount with your income either.... Sure, on paper it might still work. But what about vacation/car etc... Better stay away from it. And especially take a close look at the [Haupreis]. There's a lot more to it than you see beforehand.

Hello Mi casa, I also find the amount and the associated installment WAY too risky given your income. I have dealt with this issue extensively in the course of our house purchase, and I wonder how you want to live reasonably with one child at this rate when you add the additional costs of a house. I would refrain from it, even though it is difficult, and keep looking. This experience is (unfortunately) quite common, that on the way to homeownership there can be setbacks until you have found the right solution for yourself. And I don’t think that if the bank advisor is already advising you against it, that it is the right solution for you. - That is a huge amount you want to finance there. For comparison: We are financing 230,000 euros over 21 years with an installment of about 1200 euros monthly with an income of 4700-5000 euros monthly. Together with the monthly additional costs such as water, gas, electricity, garbage collection, property tax, etc., I had concerns for a long time whether that would be okay. I unfortunately doubt that you will get the money cheaper and secure a fixed rate over the long term... Regards from Kate