370k financing with approximately 4,000 equity

You will never be able to live cheaper in a house. Since we will be building on 350sqm, I already find 550sqm huge, I think there is enough to do :D

Yes, we both come from "large" parental homes with several hundred sqm of vegetable garden area. When the mothers were still full-time housewives and Saturdays were dedicated exclusively to the garden, it was probably manageable. To be honest, that's no longer something for us.

Because your equity is relatively high, that looks good. You have easily 30 years to pay it off. My wife and I have a similar income. Also IG Metall tariff and civil servant. And we are also your age and don't have children yet. We bought a house last year and financed 340k. I can understand your concerns about whether it will work with children and your wife's part-time job. That is also my only concern because it is somehow hard to plan. But you also have financial reserves with which you can bridge for a while if things get tight.

Do it. No problem at all because of the equity. Great parents you have :)

We currently earn a net total of about €5,000. This does not include a 13th salary, etc.; the civil servant's private health insurance has already been deducted.

Our financing requirement is €370,000.

Is this feasible with a monthly rate of €1,200? Even if my wife reduces her working hours to 50% because of the children (income €1,000 less)?

Currently, we live together on about €2,000 per month, all inclusive.

Sounds actually quite feasible. The figures are quite moderate for today's standards, where loan amounts easily rise to €500,000 and much more. You can manage with little income, you still have around €4,000 household income even with a child. With that, you can confidently consider €370,000. The second income is secure, and if all else fails, the part-time factor can be increased. A rate of €1,200 would be well below the magic third of the household income, so there would even be some leeway there.

Strike while the iron is hot and don’t worry too much. You all have what it takes to easily manage the 370k.

I would dissolve the 50% share from the inherited house. It only causes trouble, either now or in a few years, and yields little return. Whether you use the money for financing, buy something else, or invest it differently is a matter of personal preference.