Hello everyone,
I have been a silent reader here for a while. I originally wanted to ask these questions in a thread where people post quick questions and different users respond – as I’ve often seen in other forums – but unfortunately, I couldn’t find one. So, I finally decided to start my own thread.
A brief introduction about us.
I am 25 years old and have been with my company for 6 years (including my training period). I work for the city and am basically a civil servant. That means I always get some paperwork for insurance discounts and other typical benefits. It’s not an official civil servant status, but close enough in terms of job security.
My girlfriend is 22, has been working for a small to medium-sized enterprise for one year, and is doing an evening degree at the same time.
We have been a couple for nearly 6 years, and naturally, buying a house within the next few years is not off the table. We definitely do not plan to have children in the near future.
I am still a complete beginner in this field and would simply like to hear some opinions regarding our plans.
First, I have to say that our spending habits are far from ideal...
I have a net income of at least 2500€ per month (tax class 1). In addition, I receive Sunday work pay, overtime payments, on-call pay (about 200€ per month), a company car (only for commuting to and from work), and a total of 14 monthly salaries per year.
However, I only consider these extras as a buffer and do not include them in our budgeting calculations.
She has a fixed net income of 1700€ (tax class 1), which will increase at the end of the year if she completes her degree successfully.
So, we have a minimum of 4200€ available. As it stands now, aside from saving 250€ per month, everything else is basically spent. Our expenses break down as follows:
Rent: 1000€
Electricity: 80€
Internet: 50€
Car (including insurance and tax): 450€
Insurance, mobile contracts, etc.: 150€
Loan repayment (which will end in 2 months): 250€
Public transportation ticket: 100€
Savings: 250€
Since we don’t keep a detailed household budget yet, I can’t give exact figures for groceries, clothing, etc. We just buy what we need at the moment. With 1900€/month (plus my additional allowances/salaries), our annual holidays are also paid for. The car is unfortunately one of the worst financial decisions I have made, as it is hardly used except on weekends. This will be minimized when we buy a house, but I’ll leave it as it is for now.
As you can see, the 1000€ rent is a major burden and that’s exactly what bothers us most.
Currently, we are looking at properties in the area, and decent houses/semi-detached houses are around 350,000 to 450,000€ range.
No one can say where prices will be in the next few years, but this is the current situation. I have looked even less into building a house than buying one, in case anyone wants to suggest that option.
Is buying a house generally more expensive than building one?
How much mortgage payment would you recommend with this income?
I understand it probably varies a lot, but can you give a rough idea of additional monthly costs, like waste collection, home insurance, etc.? Is there a place where I can look this up for my location?
How much do you put aside monthly for home renovations?
The last two questions are the most important to me, because our spending habits are a factor – one person can do 1000€, but another only 800€.
We have not been to a bank yet. However, I once had an appointment at my house bank for the car financing, and I was “offered” roughly 750,000€ (with 60,000€ equity) for a house on the side. Since then I don’t take that bank seriously and would rather ask here first. We do have equity, but I can’t give exact amounts because there are five different contracts with varying details – hence my question about the mortgage payment.
That turned out to be quite a long text for just a few questions, but every journey starts with a first step...
Best regards and good night,
Dani
I have been a silent reader here for a while. I originally wanted to ask these questions in a thread where people post quick questions and different users respond – as I’ve often seen in other forums – but unfortunately, I couldn’t find one. So, I finally decided to start my own thread.
A brief introduction about us.
I am 25 years old and have been with my company for 6 years (including my training period). I work for the city and am basically a civil servant. That means I always get some paperwork for insurance discounts and other typical benefits. It’s not an official civil servant status, but close enough in terms of job security.
My girlfriend is 22, has been working for a small to medium-sized enterprise for one year, and is doing an evening degree at the same time.
We have been a couple for nearly 6 years, and naturally, buying a house within the next few years is not off the table. We definitely do not plan to have children in the near future.
I am still a complete beginner in this field and would simply like to hear some opinions regarding our plans.
First, I have to say that our spending habits are far from ideal...
I have a net income of at least 2500€ per month (tax class 1). In addition, I receive Sunday work pay, overtime payments, on-call pay (about 200€ per month), a company car (only for commuting to and from work), and a total of 14 monthly salaries per year.
However, I only consider these extras as a buffer and do not include them in our budgeting calculations.
She has a fixed net income of 1700€ (tax class 1), which will increase at the end of the year if she completes her degree successfully.
So, we have a minimum of 4200€ available. As it stands now, aside from saving 250€ per month, everything else is basically spent. Our expenses break down as follows:
Rent: 1000€
Electricity: 80€
Internet: 50€
Car (including insurance and tax): 450€
Insurance, mobile contracts, etc.: 150€
Loan repayment (which will end in 2 months): 250€
Public transportation ticket: 100€
Savings: 250€
Since we don’t keep a detailed household budget yet, I can’t give exact figures for groceries, clothing, etc. We just buy what we need at the moment. With 1900€/month (plus my additional allowances/salaries), our annual holidays are also paid for. The car is unfortunately one of the worst financial decisions I have made, as it is hardly used except on weekends. This will be minimized when we buy a house, but I’ll leave it as it is for now.
As you can see, the 1000€ rent is a major burden and that’s exactly what bothers us most.
Currently, we are looking at properties in the area, and decent houses/semi-detached houses are around 350,000 to 450,000€ range.
No one can say where prices will be in the next few years, but this is the current situation. I have looked even less into building a house than buying one, in case anyone wants to suggest that option.
Is buying a house generally more expensive than building one?
How much mortgage payment would you recommend with this income?
I understand it probably varies a lot, but can you give a rough idea of additional monthly costs, like waste collection, home insurance, etc.? Is there a place where I can look this up for my location?
How much do you put aside monthly for home renovations?
The last two questions are the most important to me, because our spending habits are a factor – one person can do 1000€, but another only 800€.
We have not been to a bank yet. However, I once had an appointment at my house bank for the car financing, and I was “offered” roughly 750,000€ (with 60,000€ equity) for a house on the side. Since then I don’t take that bank seriously and would rather ask here first. We do have equity, but I can’t give exact amounts because there are five different contracts with varying details – hence my question about the mortgage payment.
That turned out to be quite a long text for just a few questions, but every journey starts with a first step...
Best regards and good night,
Dani
We have equity, although I’m not sure of the exact amount. There is a contract that I received for confirmation where I only pay 40€ per month. Then there are contracts from two sets of grandparents and two sets of parents. Unfortunately, I have no idea how much they cover exactly.
I would never even consider a 110% financing.
As for the location, we quickly ruled out Hamburg. It would rather be in the surrounding area, where property prices have not yet reached 500k+ euros.
The idea of the plot of land is interesting...
I would never even consider a 110% financing.
As for the location, we quickly ruled out Hamburg. It would rather be in the surrounding area, where property prices have not yet reached 500k+ euros.
The idea of the plot of land is interesting...
S
Steffen802 Jun 2017 15:47You still seem quite naive, and I already know that you should definitely wait a bit longer.
New construction cheaper than an existing property? How do you come to that conclusion? New construction is ALWAYS significantly more expensive. Of course, you shouldn’t compare an existing property in a good location with new construction in a poor location. If the location is similar, new construction is considerably more expensive. Period.
You have equity but don’t know about it? I have no comment on that... before I even think about posting in a forum, I would at least spend some time thinking things through myself, right? And that naturally includes the question, “How much money do I actually have?” At least it’s positive that you know what you earn.
If you’re “not the saving type,” then for God’s sake, stay away from property ownership.
Your attitude rather reminds me of a kindergartener saying “I want, I want, I want.”
If you’re serious about this, then save up equity and review your expenses—not just for three months but for several years—and only THEN does it make sense to think about questions like “What do I want?”
New construction cheaper than an existing property? How do you come to that conclusion? New construction is ALWAYS significantly more expensive. Of course, you shouldn’t compare an existing property in a good location with new construction in a poor location. If the location is similar, new construction is considerably more expensive. Period.
You have equity but don’t know about it? I have no comment on that... before I even think about posting in a forum, I would at least spend some time thinking things through myself, right? And that naturally includes the question, “How much money do I actually have?” At least it’s positive that you know what you earn.
If you’re “not the saving type,” then for God’s sake, stay away from property ownership.
Your attitude rather reminds me of a kindergartener saying “I want, I want, I want.”
If you’re serious about this, then save up equity and review your expenses—not just for three months but for several years—and only THEN does it make sense to think about questions like “What do I want?”
S
Steffen802 Jun 2017 15:50"I received confirmation even though I was only paying 40€ per month." That amounts to 5000 EUR (approximately 5,500 USD), which is not considered equity. Even if you have a total of 20,000 to 30,000 EUR (about 22,000 to 33,000 USD), that typically only covers the additional construction costs, and the financing remains 100%. Significant equity should be around 50,000 to 100,000 EUR (approximately 55,000 to 110,000 USD), which is about 20 to 30% of the total amount.
Even though Steffen, as often, struggles a bit with the right tone, he is correct.
A comparable new build in a similar location is naturally significantly more EXPENSIVE than an existing property.
Additionally, new builds almost always end up costing more than initially expected. Of course, surprises can also occur with a used property, but at least you already have everything, so the overall cost risk is lower.
I would not consider the original poster’s location to be all that bad. It is quite normal to only start thinking about property ownership and family in your mid-twenties (which is actually rather early). Before that, most people are just glad to have their own money and spend it. Sure, there may be exceptions, but I don’t see it as a character flaw if an 18-year-old doesn’t put every cent into a building savings plan.
Once the original poster has figured out how much equity they have, they can calmly consider whether it even makes sense to buy property together with their girlfriend at this stage of life. How stable is the whole situation?
With a single income, you can’t make huge leaps, so depending on the equity, it’s probably more about buying a condominium (apartment/flat) rather than a house.
A comparable new build in a similar location is naturally significantly more EXPENSIVE than an existing property.
Additionally, new builds almost always end up costing more than initially expected. Of course, surprises can also occur with a used property, but at least you already have everything, so the overall cost risk is lower.
I would not consider the original poster’s location to be all that bad. It is quite normal to only start thinking about property ownership and family in your mid-twenties (which is actually rather early). Before that, most people are just glad to have their own money and spend it. Sure, there may be exceptions, but I don’t see it as a character flaw if an 18-year-old doesn’t put every cent into a building savings plan.
Once the original poster has figured out how much equity they have, they can calmly consider whether it even makes sense to buy property together with their girlfriend at this stage of life. How stable is the whole situation?
With a single income, you can’t make huge leaps, so depending on the equity, it’s probably more about buying a condominium (apartment/flat) rather than a house.
S
Steffen802 Jun 2017 16:22That he is now dealing with the topic is great, no question... but "At the moment we are watching properties in the area and attractive houses/semi-detached houses" sounds more like he wants to take action "now" as well.
I'm saying... saving for a few years (really saving, not just 3.50 EUR) makes everything look better... and then today's prices for existing properties or new construction matter much less...
I'm saying... saving for a few years (really saving, not just 3.50 EUR) makes everything look better... and then today's prices for existing properties or new construction matter much less...
M
Marvinius2 Jun 2017 17:40Well, it is also possible to save money with your first property. Maybe start with an existing home now and then build a new one in 10 years?