Taking over the parental home - how to sensibly finance renovation/refurbishment?

Who inspected the house and identified the need for renovation? (Sanitary pipes, electrical wiring, insulation, heating, roof exterior, etc.). These are also the things that have priority and that preserve and increase the value of the house.

Conversion measures such as removing walls, relocating windows/doors, relocating sanitary rooms must of course also be addressed as soon as possible. This can also increase the value of the house.

How old is the house? How big is it; When was it last renovated? How much equity do you have? How high are the existing mortgages? When was the last house appraisal? How capable are you of performing your own work?

Can someone perhaps share from experience how exactly the banks handle this?

Every bank has different rules: one only pays out after invoices or collected invoices, another pays a flat rate.

Billing furniture or second-hand building supplies.

Furniture usually does not go through real estate financing. Very, very rarely the kitchen, more likely lamps installed on the facade, but no household furniture.
Building supplies through equity or on request at the bank (flat rates for various items)

So I have applied for an advance payment several times at Volksbank and actually always uploaded the list of invoices with which I "used up" the last one (proofs of use). But I am sure some small thing got "lost" in the process. That means I stated about 300-something EUR for materials, but only 258 were proven by receipts; the next advance payment was made anyway. I'm curious whether they will want everything exactly in the end. I don't think so...

Wow, thanks for the feedback and your time! We have now come to the conclusion that we probably want or need a mortgage for renovation/repair – or possibly to split it into two parts. Regarding the construction aspects: We have a meeting with an architect tomorrow who will hopefully accompany us throughout the entire renovation – and where structural issues will also be discussed.

By now we have come to realize that we probably want/need a mortgage for a renovation/repair

What do you understand by mortgage? That no longer exists today. You mean a "normal" construction loan, right? With land register security (mortgage is also just a security for a loan).

What do you understand by a mortgage? Those no longer exist today. You mean a "normal" construction financing, right? With land register security (a mortgage is also just a security for a loan).

Exactly, that’s what I meant. I’m really surprised how many components this topic has. The house probably has to be appraised first anyway – unfortunately, the lead times for appointments at the bank take just as long as an initial meeting with craftsmen.