Which space is missing? The dance hall that is supposed to become a condominium? You don't need that at all.
You have to plan so that your budget is sufficient and leaves a buffer. At the moment, there is a big deficit between planning and budget.
You are planning for 2 children. You are missing monthly income with higher costs and that for a longer period. Don't take away your breathing space by going into too much debt now.
With a house, hobbies and the allocation of time with children change again. There will be times when you have no time for hobbies, and if you do, you are just happy to be able to sleep.