I think #1 is ambiguous, and #2 is awkward. It's a good question -- there's not really an obvious answer. How about "Hungarian-German translator"? (Assuming that he/she translates from Hungarian into German rather than, say, Italian into German.) If someone does translations from many languages into German, I would say "He is a translator. He translates into German."
My late father translated English into Chinese, and his job description was 'Chinese Translator'. EDIT: I don't know how native speakers describe his occupation.