Maximum loan amount based on our monthly burden

Considering the numbers that come up here sometimes, I personally feel sick. I would generally never finance beyond retirement. Likewise, you have to be able to carry a house alone for at least half a year. In our case, me, as the main earner and civil servant. Right, brokers earn their commission. Often dependent on the amount of the loan they mediate. We got a fee-based advisor, who is paid directly by us (and not indirectly through fees). He calculated everything down to the smallest detail and took care of everything. He also listed the income and expenses in detail and advised us so that we can live comfortably. Of course, it doesn't come out to 400k€. By the way, in my opinion, a house is a luxury position that basically raises the standard of living. But you basically don't make money, you rather sink a lot of it. You pay EVERYTHING yourself. I've never lived as relaxed as when renting. But also never as free as in my own house.

well, it doesn't have to be a fee-based advisor. It is enough to consult the house bank and 2-3 major brokers. After that, hopefully one can distinguish the good offers from the bad ones. I just find it amusing that a broker, without batting an eye, pulls out 500k based on bare numbers and doesn't mention the risks.

It's clear. The financial advisor looks at the equity, the income, the age, and then gets started.

- Super interest rates possible
- Really great demonstrability
- if applicable, another home savings contract on €200k for security with allocation at 60%
- KfW is not needed

Did I forget anything?

It's clear. The financial advisor looks at the equity, the income, the age, and then gets started.

- Super interest rates possible
- Great presentation
- Possibly a building savings contract on €200k for security with allocation at 60%
- No need for KfW

Did I forget anything?

yes, nice RLV for protection. Best to answer all health questions with NO so that no annoying follow-up questions come from the insurer because you went to the psych doc 4 years ago and everything is healed

That's all well and good, but why now drastically lower the standard of living in order to possibly benefit from a speculative added value in the distant future?

Why lower the standard of living when you own a house? Certainly, you could possibly build smaller, but why wouldn’t you gain an increase in standard of living with a house as you wish it, while maybe giving up things elsewhere that you wouldn’t have given up without children?
Can’t this be seen as a shift in attitude towards the topic of standard of living? A beautiful house and children, instead of going on vacation twice a year, eating out maybe only twice instead of four times a month? Minimizing concerts? Moreover, all of that - if you consider the income of the original poster - is not a shift to nothing at all, but rather to something nice with the children? Possibly also the house in which the children - perhaps in a nicer environment - grow up more calmly and gently?
I also understand families who don’t want to give up certain things and therefore calculate as if they would have to do it with a house. But aren’t they then perhaps more willing, and above all, can they really get help, advice, or opinions from other families in different regions, with different attitudes towards life and consumption, different risk mentalities, but above all very different characters?
I always look around in our circle of friends, with none of them would I really want to trade places, but I also wouldn’t want to interfere in anyone’s planning and implementation of their wishes. I don’t think I could even give good advice, no, I wouldn’t even want to.
I find it incredibly difficult to give advice, assistance, or recommendations, especially if I didn’t know the person at all and even less would I presume to generalize from myself to others.

Opinions do differ a bit. One aspect is, in my opinion, always somewhat overlooked: For the money you get a counterpart value (the house with the land) – and as the prices for building land and real estate have developed in the last 10 years, at least the value of the land will not decrease.
By building a house (and paying off the loan) you basically create added value.
Logically, the finances must add up overall. And I know how much many people like to plan everything. I am neither in favor of naive approaches nor detailed financial life planning for the next 50 years. Based on the initial situation described by the original poster, I am of the opinion that financing of about €400,000 is definitely feasible.
(Off-Topic: I have been following the development of building land prices in the Palatinate since 2004. If good infrastructure is available – shopping facilities, doctors, schools, etc. – then the prices have risen extremely. It is developing roughly like ten years earlier in Switzerland – and even there no price reduction for building land is visible today. With that I want to say: If I can buy building land and realize a house construction today, then waiting makes no sense!).

What does it do for you if the property gains value?
Sure, maybe you sell because the house is too big for you in old age and buy an apartment from it, which has also become more expensive...
In the end, you will probably only profit from it as an investor.

Or rather, the children when you eventually kick the bucket.

I also do not see a decrease in the standard of living, merely a re-prioritization. I also consider knowingly re-prioritizing to be healthier than always wanting to have everything.