It's also a bit confusing when you read the initial post.
You are being gifted the house & land - presumably from a parent? There could be tax issues there which you will need to look into as well. Has the transfer actually happened or is it a proposed transfer?
At the moment you're saying that the house is worth €60k, the land is worth €250k. After €120k of renovations the house will be worth €180k. Are you sure that it would be worth that amount? I can see why the bank would be reluctant to advance €120k for the house project. The land is presumably family land & it would be difficult to realise any value from it & so it's not really a great collateral proposition.
You are looking at total borrowings of €330k on a best case scenario on assets of €130k + €200k (after renovation) = €330k. I'm leaving out the land value here. There's no equity in this for the bank. Plus on an income of €90k you are looking at borrowings of 3.6 times income.
Do you want to do this urgently? I think it would be very difficult to get a bank to go for this.
Is your current home close to the old family home?
If you own the home house & land could you renovate slowly over a number of years using your savings, your mother's savings & income (presuming she lives with you?) and your income? You'll be paying down your mortgage at the same time and hopefully coming out of negative equity.
If it were me I would not sell the current home & carry the loss. I'd just wait & do things slowly & gradually. I know that's frustrating though.