How much home should I really buy? How much should I really spend?

 

 I am often asked by my buyers, “How much homes should we buy?” I always recommend to my buyers that they buy a little less than the legal limits. The legal limits are incredibly high and by the time you pay your mortgage, you don’t have much left for your car payment and other living expenses.

I always tell my clients, “You never complain that your mortgage payment is too low”. My advice to buyers is to buy a little less home than you can afford if you want to have a lifestyle outside of that house. I have seen people strap themselves so tight that they comes back to me couple of years down the road, when against my advice they bought a more expensive properties saying, “Tom, can you sell us out of this”. We can’t do anything. We can’t travel. We can’t do any vacations. We can’t buy a new car because we are tapped out. At the end of every month, there is not enough check left.

Seriously, consider when your lender says you can afford XYZ, that’s taken it to the maximum in most cases. My advice is going to buy substantially less at a payment that is very comfortable for you; not marginally comfortable but very comfortable for you. You will thank me down the road when your mortgage payment is going to be low and you are actually able to enjoy the other finer things in life.