If you have good credit and are preparing to purchase some
real estate, it is important to consider just how much house you need. This simple consideration greatly shapes your home buying process. The Equifax Finance Blog has a few tips to help narrow your search with the article, “
How Big of a House Do You Need?”
How much of a home to buy is really a two-part question. The first is how much physical space does you and your family need? This can be a tricky question, as you have to plan not only for now, but for the future. This is because making big changes to a house is quite expensive, so it is important to get the number of bedrooms and bathrooms right early on. Other home features are important to consider, too, from whether or not you need a formal dining room, a guest room or a basement.
The other question is how big of a
mortgage can you comfortably afford? A mortgage is a long term financial commitment and one you definitely don’t want to over-extend yourself on, as that could lead you to a ruined FICO score, debt, and potentially foreclosure. You have to even be careful with the amount you pre-qualify for. Just because a bank is willing to lend you a certain amount, it doesn’t mean that you need to take out that much. Carefully consider how much you can afford each month on housing, including not only home price, but also utilities, maintenance, taxes, HOA fees, etc.
The Equifax Finance Blog explores these two questions in more detail in the full article. Be sure to explore the article and the wealth of information about credit, taxes, retirement planning and more on the blog, which offers a comprehensive source of money management tips.