If you're in the market for a new home, and you've been approved for more home than you'd planned, it can be tempting to go for the bigger home. However, just because you can afford a more expensive home doesn't necessarily mean you should go for it. In fact, there's a lot to be said for staying below your budget when buying a home. Before you max out your housing budget, take a look at the reasons why you should choose a home that's well below the budget instead.
Property Values Don't Always Go Up
The housing market is stable right now, but recent market struggles have shown one important thing; property values don't always go up. In fact, during a market crisis, like the one the US experienced a few years ago, property values can come crashing down quite quickly. If that happens again, and you've purchased a home with an inflated value, you could suddenly find yourself owning a home that's worth far less than you initially paid for it. You can avoid that disaster by staying at, or below your intended housing budget.
Less House Means Less Maintenance
If you're thinking about buying a bigger house than you had initially intended, it's important to remember that bigger houses come with bigger maintenance needs. Unfortunately, that means you'll need to add money to your housing budget that you might not have anticipated. One of the benefits of staying within your budget is that a smaller home means a smaller maintenance budget. It also means that your utility bills will be lower too.
Life Has a Way of Changing Unexpectedly
When it comes to life, things have a way of changing unexpectedly, and not always for the better. You may be able to afford a more expensive house now, but that doesn't mean it will stay that way. Accidents, illnesses, divorce, and loss of employment can turn your life upside down. Sticking with your intended budget will help you weather any storms that may pass your way.
Lower Initial Cost Allows for Speedier Payoff
Now that you're buying a home, you need to think about the eventual payoff. Stretching your budget to get more of a house than you anticipated may not be the best idea in the long-run. In fact, by sticking with your housing budget, you may actually be able to pay your new house off more quickly. One way to do that would be to use the extra money you'd be spending on a bigger house payment, to pay down the principal on your new home loan.
For more information, contact your local real estate agent.