Construction financing for a large family house

Hello,
We would like to build within the next 2 years. However, I find it difficult to assess the financial feasibility, so I would appreciate some feedback.

Regarding the framework data:
We are a family with 5 children, one main earner (civil servant for life) and one minor earner (employed for 10 years). We are in our early and mid-thirties. Currently, we live in a home with 150,000 euros still outstanding, which, thanks to the current market situation and good condition, can very likely be sold for at least 220,000. The household income is 6,500 euros net. Apart from the house, there is not much equity available, as we became parents early and with 5 children we have recently had many expenses and have been continuously renovating the house (roof, bathrooms...). So there would be 50,000-80,000 from the sale plus 10,000 from a Wohnriester. Additionally, last year due to illnesses and installments for a larger car, we often ended up slightly overdrawn at the end of the month. However, the car loan will soon be paid off and the financial situation will be much better again.
Our idea would be a house for 300,000 including 50,000 ancillary construction costs plus a plot of land for 60,000. We have been used for years to the house installment of 1,100 plus about 400 euros, whose feasibility we have also demonstrated through the previously higher car installment. Additionally, the Wohnriester runs in such a way that it would be ready for allocation in 12 years with about 80,000, half of which is equity, the rest is a building loan.

My questions now:
- Would you now, with a better financial situation, first manage your household well for a few months and then go to the bank?
- How long should we wait?
- Can we even get financing with our per capita income? How realistic is the financial framework?
- Is the Wohnriester "useless" with 5 children? You read so much negative stuff...
- Can you already buy the plot of land with the Wohnriester?
- How is it handled when you sell your home and build a new one and have almost all equity tied up in the house?

Oh, the plan is that in 2 years I will work more again and thus have a bit more income available.

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How long has the loan been running and how much interest are you counting on? Possibly, not much will remain of your targeted 50k difference.

We are allowed to "take" the loan in any case with a property change, without prepayment penalty. I have already inquired about that. Interest rate is 2.2% effective, then for another 10 years after 2 years

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We are allowed to "take along" the loan in any case with a property change, without prepayment penalty. I have already inquired about that. The interest rate is 2.2% effective, then in 2 years for another 10 years

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that's already great. But in this case, you should also ask your bank about feasibility. No bank will go into subordination with a 150k main loan.

You should rather check the price of the new house and realistically estimate the sale so that no equity is lost because of different expectations. Your house is not sold yet by far. Or sell it now with the option that you stay in it during the construction phase.

For the profit from the house, your house bank can give you bridge financing.

As I said, your house bank is now in charge.

We would only sell if we can get at least 200,000 for it. Otherwise, we will keep living in it for now... and yes, [Wohnrecht während der Bauphase] makes sense, thanks for the tip.

At the moment, we are financing through [die Sparkasse], and we want/have to stay with them.

What do you think about the other factors? What can be said about the financial situation, the installment, and the loan amount?

It’s clear that we have to go to the bank. We can’t manage that right now with the [Schreibaby], it will have to wait a few more weeks. That’s why I was interested in your assessment as additional info.

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