retaining wall

hi all, first post. we are soon to start the process of raising and extending our house. any advice on which is the best way to go with using a retaining wall in common with a living area downstairs or is it better to keep the wall away from the house. once we dig out and raise/hold the house options are to dig footings in line with wall or a metre or so away. the wall will be no higher than 1 metre. both options have advantages, not sure which way to go.
thanks in advance

I take it is a clad frame & not a brick veneer or solid brick ?

Some pictures or rough diagrams would help.

Al :)