Should You Buy as Much House as You Can Afford?

When it comes to buying houses, shoppers have a major decision to make: do they buy as much house as they can afford, or do they go a bit smaller?

Using a house payment calculator can help you figure out what your finances will look like after the purchase, and that’s good advice. See, the planning ahead is vital.

Basically, what it comes down to is this: you may have the house, but what else do you need to pay for now?

Let’s get into some of these details.

Consider What Comes After

Okay, you’ve just plunked down $300,000 for a house. That’s quite a bit. It’s the home of your dreams, but that was still, again, quite a bit.

What happens now? Do you still have money for the bills that, by the way, will be coming up quite soon? How about your first property tax bill? How about basic groceries and gas for your cars?

Yes, you have to consider what happens after you buy that house, or you’ll go house poor.

Consider the Distant Future

Everyone needs money, not just now, but in their futures. You need savings and retirement accounts. If you’re smart, you’ll also have investments put away for much later.

How are all these things looking since you bought that huge house? Do you still have enough to put away every month or so? Or did your purchase drag down all your finances with it?

You have to consider all these things when looking at house prices against your bank accounts.

Consider the Upkeep

Okay, you bought a big mansion. Now that you have it, who’s going to maintain it? Ideally, that would be you, but will you always have the time to devote to cleaning every inch of it? If you don’t have time, can you hire people to help?

These are all the questions you must ask yourself when considering how much house to buy. Maybe for you, the answers to all these questions push you to go buy a whole lot of house. That’s awesome! But if you think your finances will be strapped, go for something much smaller.

Remember, there’s no shame in buying a small house, or a “starter” house, as they’re known. You can even save money while living there for a bigger house down the line!