Construction financing for a large family house

We were finally at the Sparkasse and have an approval. He has now calculated with a total volume of 425,000, of which 60,000 is equity. More credit would not be a problem either, says the bank. The interest rate for the [Grundstück] is 1.85% nominal, whereby we first borrow 110% through the pre-financing. How exactly it proceeds from here, I will have to inquire.

Hello Arifas, I cannot understand your financing plan at all. Are you financing the land now?

Sorry, it is not described very clearly because it is not that clear yet.

So yes, if everything works out, we will soon buy and finance the plot of land. Then next is the building application, and once that is approved, our house will be sold and we will finance and build the new house.
That’s the plan. Exactly how this will proceed is still unclear. That still needs to be discussed with the bank.

What is encouraging for us, however, is that the bank is supporting us and financing us in the amount we need and also with the risk that the amount of our equity is not yet clear. This will only be available after the house sale. That means at the moment we basically have nothing to contribute. The individual loans are then supposed to be combined at the end and supplemented with a Wohnriester.

Next week I will ask for more details about how I should imagine this. For now, it is reassuring that the Sparkasse sees no problem with participating.

So, it will now be a larger plot, which can also be built on immediately. Unfortunately a bit more expensive, but now almost 900 sqm, additional costs in a nice NBG.
We now have estimated costs (the house was calculated for the other plot and is therefore not quite up to date):

88,000 for the plot including additional costs
260,000 for a hillside house with a slab foundation (about 200 sqm)
20,000 for vinyl floors including installation and wall paint (is that enough??)
22,000 additional costs for KFW55 and solar
Estimated by me 40,000 for fees, surveying, house connections and earthworks on a plot with 180cm slope over 10m of the house.
(The construction company estimated less additional costs)
Total around 430,000 euros

Missing: outdoor facilities and external storage room (10,000 material costs)

Income has changed after all (I can fairly freely determine my working hours...). Thus, we have just over 7,000 euros net household income. We would like to have a monthly payment of 1,600. We continue to calculate with 60,000 equity (old house was appraised twice, that should be fine).

Now our question is: we won’t make it with our set limit of about 425,000 since the outdoor facilities are missing. Because of the children (private school, instrumental lessons...) we also won’t be able to pay huge sums for the outdoor facilities additionally from the monthly income.
What would you do? Plan the house smaller than 200 sqm? Give up KFW55? Or borrow 10,000 euros more?
The latter was actually the bank’s suggestion, which we don’t really want...

So, what would you do?

I want to make it clear that we do not have the children in the private school because we want to be "something better" or anything like that. Among other things, we want them to learn crafts and art in addition to the regular subjects. That's why. It is important to me not to be "misjudged."

I have only skimmed the thread a little, but when I consider that our 125sqm on a similar construction level cost about 300TEUR (without land), I am not sure how that can realistically work with your budget.