This week we have been talking a lot about selling your home. Well, after your home finally sells, you will probably want a new place to live. One of the questions on your mind is probably about how much you should buy. This applies to both total size (as in square foot), and also with price. Not everyone works for everyone.
Here are tips to determine how big and how much your next house should be.
A house within your budget.
How much is your budget? If you have a budget, then be strict with yourself when it comes to your budget. Don’t look at houses above your budget, even if it’s just a little bit above. You should be realistic with yourself and stick to homes that you know that you can afford.
Also, if you are approved for a certain amount, you should always try to shoot for a number below that. Banks almost always approve potential homeowners for a much higher amount that they can actually afford.
You might want to shoot for a certain percentage of your income. Do you want to be around the 10% mark? Or the 30% mark? I prefer for it to be low, somewhere around 10%. However, that is of course not possible in all cities.
A house that fits your family.
If you have a large enough budget, then you will probably want a home that is large enough for your family. How many children do you have? If you have five children, looking at one bedroom condos is probably not within your budget.
However, buying a six bedroom home (one bedroom for you plus each of the five children) may be too high for your budget.
A house that you can afford the bills on.
You might be able to afford a large home, but can you afford the larger utility bills that come with it? Also, could you afford the property taxes on the home as well?
Bigger homes will almost always mean larger utility bills because there will be more house to heat, more house to cool down, more house that needs electricity and so on. A more expensive house most likely means higher property taxes as well.
If you need further mortgage advice, check out First Mortgage here.
How big is your home? Why did you buy that size?