Parental home extension, land gifted - financing possible?

Hello,

I would like to hear your assessment of the financing.
In advance: I am quite aware that this is not a great starting situation.

There has been talk from time to time about extending my parents' house. Now it has become concrete, and they would gift me a part of their property (300-400 sqm). Unfortunately, I don’t know the value yet. According to the standard land value, it is only 100 EUR/sqm. But the market value could still be different.

I have been researching prices, incidental building costs, etc. practically non-stop on the internet for days.
I come to an estimated value for the house + all incidental costs of 250,000-300,000 EUR.
Next week we have a first appointment with a house construction company to have a reference value at all.

We would like to do the interior finishing ourselves such as laying the floor, installing doors, painting, insulating,... We do not dare to do the electrical work, heating, etc.

We have a monthly net income of about 4,600 EUR (same company, family business of my parents).
Monthly fixed costs currently amount to about 1,700 EUR including warm rent of 750 EUR.
The other 950 EUR fixed costs consist of:
Daycare 400 EUR (this item will be roughly halved at the new place of residence)
Private loan installment 271 EUR (outstanding debt about 17,000 EUR)
Gas + electricity 150 EUR
Insurances about 70 EUR
TV + mobile + internet 90 EUR
+ miscellaneous

Our car is a company car and the costs including fuel are already deducted from the salary.

We have no significant "cash" equity. Why?
It certainly has to do with wrong priorities. However, my husband only recently changed jobs and earned more money than I did while I was already on parental leave. Afterwards, I worked part-time and earned little. Now I work full-time.
Until recently, we also lived in a rented terraced house. Warm rent about 1,300 EUR.
We also only recently sold the second car (for 600 EUR, so not worth mentioning). But it now saves fuel and insurance costs.

So we were able to significantly reduce our costs and increase our income. The plan is definitely to save 1,500-2,000 EUR per month.

What do you think about the overall situation?

Thank you very much and best regards

With a rate of 1500€+ 300k€ should not be a problem.

Well, how long have you been saving already? Nothing has been saved yet, otherwise you would have paid off the installment loan within half a year. But yes, with 1500 you can manage 300k. It should be possible!

Even if the property is given as a gift, you cannot avoid some expenses that cannot be financed. The gift will cost something, you can get the house construction financed if you are not the bank’s problem child, later the kitchen, furniture, and possibly lighting must be paid from equity.

Whether a balance of, for example, 17,000 is to be viewed positively is debatable. Here it looks like 34,000 less -> you have debts. Whether the bank will find that disturbing for your project only they can say.

They will expect you to make sure to pay off the loan first.

Aside from that, you have a good salary.

Nevertheless, you should calculate properly. Living expenses also include food, clothing, and hobbies.

Here it looks 34000 less -> you have debts.

What exactly do you mean by 34000? With 800 EUR fixed costs, 1000 EUR living expenses, and 1000 EUR reserve for savings or other expenses, 1800 EUR remain for the installment + additional costs. Leaving aside our debts (the loan still runs for 5 years and after that we would have another 271 EUR available monthly), it should fit, right?

What exactly do you mean by 34000?

With 800 EUR fixed costs, 1000 EUR living expenses and 1000 EUR reserve for savings or other expenses, 1800 EUR remain for the installment + additional costs.
Putting our debts aside (the loan still runs for 5 years and afterwards we would have another 271 EUR available monthly), it should fit, right?

What do I mean? You have debts... 17000 from a private loan. No BAföG or the like.
In this case, the salary may play a subordinate role for the bank and they might not grant a loan because they would prefer that you have at least 34000 more in your account.

You are expecting a >110% financing despite the deficit, so about a ~120% financing.

Only a lender can tell you whether you will get a loan.