What happens when your wants do not meet up with your housing budget? When told of the amount you have available are you determined to use it all? If it doesn't seem like enough do you borrow from family and then have to pay them back later?It seems the vast majority of all buyers I work with do want to use all of their budget and sometimes more. Is this wise with the wreckage of the last generations overindulgences in the housing market still in the process of foreclosure?
Generally it is reccomended to keep your mortgage payment to about 25% of your income but some people push the envelope and go to 30%. While this doesn't seem like such a big distinction it is. A bigger house means bigger payments, higher utilities, higher taxes, higher insurance, higher maintenance costs, and that is not even counting things like any updating you might want to do. A house can be a resource hog if you don't put care into buying the right one.
If you are buying at the top of your budget because you assume your income will increase what will you do if it doesn't, or if you are laid off? Does it feel like you have plenty of room in your budget now? But will you if you start a family and you have one less income? When buying, have you figured in those special things you like to do? Your daughter's new braces, your yearly vacation, and the family gym membership are all going to take a bite of the pie. Money issues are the number one cause of discourse in marital relationships so is that large house really worth it?
Its very easy to get caught up in the excitement of buying a house without putting any thoughts into the what if's. But if you don't you could have a crippling debt load later that will leave you sitting home eating ramen noodles fighting with you spouse because you would rather go out to eat. Is this big house really worth it if it results in a split in your marriage and you later have to sell it to satisfy your divorce proceedings? So I implore you....think about the what if's before you put in that offer. Life is to short be be living check to check to afford a lifestyle you can't really afford.