ᐅ Own Property from the Start? A Beginner Needs Straight Talk...
Created on: 20 Aug 2016 18:35
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Titus72
Hello everyone,
I’m new to this forum and just want to say a friendly HELLO to all.
I already have a fundamental question: Does my dream of owning a home fit into reality from the start? I feel like I haven’t really accepted the price reality yet and am still stuck in the 80s/90s...
But what is this actually about? Well, for years I considered buying a property financially unwise. So, I’m still renting. However, I want to improve my living quality and have been looking for a new apartment for a long time (I live in Braunschweig). And what can I say: I’m frankly shocked by the rent prices in this area. What my wife and I would like doesn’t come under €1200 cold rent, with prices trending higher...
So, like many these days, I started thinking about buying. Naturally, the question arises: what can I afford and what do I want? And here, I think I might still be wearing rose-colored glasses!
About me: male, married, children planned soon
Net income about €5200–5400 (depending on the number of shifts) working 60–70 hours a week
(in the coming years, the salary will increase due to experience and step raises), no bonuses or similar, no Christmas bonus, etc.
My fixed monthly costs are around €3800
This includes a monthly savings rate of €1400
Current warm rent including electricity is €830
Still need to consider monthly living expenses like groceries, etc.
My own equity currently amounts to about €80,000, but it’s tied up and not currently freely available, so let’s say my equity = €0, oops.
Looking at property prices in our region (Braunschweig), I’d have to budget around €350,000–450,000 for an average single-family home. And I always wonder: who can afford this immediately?? I know I’m lucky to be among the higher earners. And when I see on radio, film, or TV the kind of houses some people live in (who earn significantly less than I do), I’m amazed. How do they manage it: great house, nice car, good clothes, etc.?
To be clear: this is not envy, I truly wish everyone well. My question is always: why can’t I afford it? Where am I miscalculating, where is my mental block? Apart from a car loan, I have no debts and don’t live extravagantly...
So, who among you experienced folks can help me see things clearly or take off my rose-colored glasses?
Best regards,
Titus72
I’m new to this forum and just want to say a friendly HELLO to all.
I already have a fundamental question: Does my dream of owning a home fit into reality from the start? I feel like I haven’t really accepted the price reality yet and am still stuck in the 80s/90s...
But what is this actually about? Well, for years I considered buying a property financially unwise. So, I’m still renting. However, I want to improve my living quality and have been looking for a new apartment for a long time (I live in Braunschweig). And what can I say: I’m frankly shocked by the rent prices in this area. What my wife and I would like doesn’t come under €1200 cold rent, with prices trending higher...
So, like many these days, I started thinking about buying. Naturally, the question arises: what can I afford and what do I want? And here, I think I might still be wearing rose-colored glasses!
About me: male, married, children planned soon
Net income about €5200–5400 (depending on the number of shifts) working 60–70 hours a week
(in the coming years, the salary will increase due to experience and step raises), no bonuses or similar, no Christmas bonus, etc.
My fixed monthly costs are around €3800
This includes a monthly savings rate of €1400
Current warm rent including electricity is €830
Still need to consider monthly living expenses like groceries, etc.
My own equity currently amounts to about €80,000, but it’s tied up and not currently freely available, so let’s say my equity = €0, oops.
Looking at property prices in our region (Braunschweig), I’d have to budget around €350,000–450,000 for an average single-family home. And I always wonder: who can afford this immediately?? I know I’m lucky to be among the higher earners. And when I see on radio, film, or TV the kind of houses some people live in (who earn significantly less than I do), I’m amazed. How do they manage it: great house, nice car, good clothes, etc.?
To be clear: this is not envy, I truly wish everyone well. My question is always: why can’t I afford it? Where am I miscalculating, where is my mental block? Apart from a car loan, I have no debts and don’t live extravagantly...
So, who among you experienced folks can help me see things clearly or take off my rose-colored glasses?
Best regards,
Titus72
H
HilfeHilfe24 Aug 2016 20:43Then you can quickly convert the funds into cash, and that gives you your equity.
C
Che.guevara25 Aug 2016 06:42The key question has already been asked three times:
Does your wife work?
If yes, great; if not, you can still afford the house, but in case of a divorce, you will start over from scratch and the house will be gone. ... only about 45 percent of marriages end in divorce ... ; and if you work 60-70 hours a week, you will quickly grow apart. This is not a sustainable lifestyle for you in the long run!
So make sure your wife gets moving as well.
Does your wife work?
If yes, great; if not, you can still afford the house, but in case of a divorce, you will start over from scratch and the house will be gone. ... only about 45 percent of marriages end in divorce ... ; and if you work 60-70 hours a week, you will quickly grow apart. This is not a sustainable lifestyle for you in the long run!
So make sure your wife gets moving as well.
Che.guevara schrieb:
If yes, great; if not, you might still afford the house, but in case of a divorce, you’d be starting from scratch and the house would be gone. … only about 45 percent of marriages end in divorce …; and if you work 60–70 hours, you’ve probably grown apart quickly. This is not a sustainable life plan for you!Not the same old story.
If you plan for divorce, then 95% of homebuyers shouldn’t build a house.
If both partners earn about the same, it usually isn’t enough for one to fully take over the house and pay out the other’s equity.
Titus72 schrieb:
I’m a bit old-fashioned when it comes to finances. That means I generally don’t like taking out loans. Either I can afford something outright, or I save up until I have the full amount. (The only exception was when I bought a car… oops.) I also always keep a certain "safety cushion" in my checking account at the end of the month. Otherwise, I sleep poorly. I’ve only ever overdrafted my account once in my life (by €50). Like I said, quite old-fashioned.If you stay grounded and only finance "major projects" (car, house), you already have very good conditions for a successful home loan.
Che.guevara schrieb:
... in the case of a divorce ....You might be right that in most cases a house has to be sold after a divorce, but @Musketier is absolutely correct.
If that were true, hardly anyone here would build a house – every marriage could fail.
The same applies to financing: there are often income differences between spouses, so if one partner experiences a long-term job loss, the other may not be able to cover the mortgage payments alone. (In my case, it would be zero risk if I lose my job – my wife could NEVER afford to keep the house on her own – but the other way around would work.) Should everyone then give up their dream of owning their own home? If that were the case, probably 75% of owner-occupied homes would never have been built.
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Che.guevara25 Aug 2016 09:50@f-pNo
I’m not saying that!
Here, someone is asking to have their rose-colored glasses taken off.
Through remote diagnosis (60-hour workweek), and planned children, I’m pointing out some possible connections—nothing more.
Maybe the original poster will soon take on a part-time job with 40 hours, and his wife will compensate the rest to maintain their previous net income.
Large disparities occasionally lead to disaster. I wouldn’t wish that on anyone, and a prenuptial agreement could help—although in the rose-colored phase, most men usually don’t see the need for one.
I don’t want to discourage the original poster—he will do it! But maybe I can raise some awareness so that ten years down the line, he won’t look back on his life and analyze the mistakes he made then.
I’m not saying that!
Here, someone is asking to have their rose-colored glasses taken off.
Through remote diagnosis (60-hour workweek), and planned children, I’m pointing out some possible connections—nothing more.
Maybe the original poster will soon take on a part-time job with 40 hours, and his wife will compensate the rest to maintain their previous net income.
Large disparities occasionally lead to disaster. I wouldn’t wish that on anyone, and a prenuptial agreement could help—although in the rose-colored phase, most men usually don’t see the need for one.
I don’t want to discourage the original poster—he will do it! But maybe I can raise some awareness so that ten years down the line, he won’t look back on his life and analyze the mistakes he made then.