Conventional wisdom has it that you should buy a house you can afford, and many people buy homes at the top end of their budgets. Unfortunately, conventional wisdom is not always right, and buying a house at the maximum price you can afford is fraught with a few dangers. Here are a few reasons why you should, instead, buy a house just below the maximum you can afford:
The Biggest House You Can Afford May Be Bigger Than What You Need
Buying the biggest home you can afford may leave you with a big house that you don't necessarily need, and that is a waste of money—plain and simple. For example, there is no need to buy a seven-bedroom house if you only need a three-bedroom one. You can end up with extra rooms that you don't use. You will only be tying up your money in something you don't need.
Buying Below Your Means Gives You a Cushion in Cases Your Finances Take a Beating
The cost of a house is not just about the actual purchase price; you have to factor in other regular costs such as home insurance, utility bills, property taxes, and maintenance costs, among others. If you have purchased the most expensive house you can afford, it means your finances are stretched to their maximum. That is a dangerous situation to find yourself in; a slight fall in your finances may leave you unable to keep your house. If you buy below your means, then you still have some breathing room in case your financial situation slightly worsens.
Buying the Biggest House You Can Afford Will Attract Extra Expenses
Lastly, buying the biggest house will force you to incur extra expenses that you don't need. For example, an unusually big house may leave you with some unused rooms that you will, nonetheless, have to maintain just like the rest of the house. For example, while repainting your home, you will also have to repaint the unused rooms. Your unused rooms will also need furniture; it's unlikely that you will leave them unfurnished. Then there is also the issue of pest infestation; close a few doors and leave some rooms unused for long enough, and you are likely to find some critters in there after some time.
A real estate agent can show you house listings and help you calculate all the potential expenditures of buying and owning a home. That way, you are better placed to determine how much to spend for a house.