Financing for a construction project

Good day,
my wife and I recently had a building project planned.
Bungalow house including land + additional costs 250,000 euros. (40 km south of Berlin)
So much for that...
Unfortunately, there are some financial hurdles that now need to be overcome.

1. I still have an open loan from a car purchase. 22,000 euros, installment 720 euros!
I chose the installment deliberately high because I am not a fan of long terms.

2. My wife recently gave up her job and is now accordingly looking for work.
However, we assume that she will have found something new in the next few weeks.

Income

Wife: 1,200 euros net (unemployed)
Husband: 2,300 euros net (employee)
1 child: 194 euros

Total 3,700 euros

Equity 25,000 euros

Expenses
Rent including heating: 580 euros
Installment: 720 euros
Other expenses: 1,200 euros phone, TV, clothing, etc.

Total 2,500 euros

Question 1
Would it be more sensible to restructure my installment loan of currently 720 euros to a significantly smaller installment in order to make my household income more attractive to lenders?

Question 2
I don’t know how lenders will view my wife’s current situation regarding unemployment and whether her mother could possibly act as a guarantor.
We also thought about a granny flat and including her mother as additional rental income.

I would be very grateful for answers.

Bungalow house including land + additional costs 250,000 euros.

I strongly doubt that for 250k.
I will be more specific about how big the house should be and what a plot costs.

1. I still have an outstanding loan from a car purchase. 22,000 euros, installment 720 euros!

Sell the car or stay a tenant.

2. My wife recently gave up her job. And is now accordingly unemployed.

Get a new job, then consider further; as it stands, no bank will probably finance you.

Equity 25,000 euros

With regard to building a house, that unfortunately is not even enough for the additional costs.

Conclusion: That will probably not work out.

Regards

Short and sweet: even though it is cheap to build near Berlin, it will not work, not even with car sales.

Better to keep renting.

Best regards

Woman is not creditworthy. Start a new job and try again after passing the probation period.

I also strongly doubt the completeness of the cost side.

Plot 700 sqm 19,000 Euro Additional costs amount to + New street from 17,000 Euro to 46,000 Euro. House approx. 200,000 Euro

What if your mother were to act as a guarantor. Would something like that be possible with a construction loan? Or if you as a tenant were also considered in the financing. Then there would be three salaries available.