When buying a new house, it’s easy to get distracted by size and think that bigger is better. However, depending on your situation, the opposite may be true.
So how can you determine if your new home is too small, too big, or “just right?” You’ll want to consider these elements.
What’s Your Long-Term Goal?
How many years do you see yourself in this house? Is this the place where you want to raise your kids and retire? Do you expect to have other family members live with you now or in the future, such as an aging parent, sibling, or adult children? If not, then a larger size home may not be as crucial as you think. Consider the fact that you will likely move again, which means that you can upgrade or downsize in the future if necessary. Many first time buyers start out with an entry level home and then leverage their equity in the future toward their next home when it’s time for a move.
What’s Your Financial Limit?
For the most part, you don’t want more home than you can truly afford. Keep in mind that the cost of ownership no only includes your regular housing expense such as mortgage, taxes and insurance but also includes other expenses such as maintenance costs and utility costs that tend to escalate with the increased size of the home. While you may be getting that promotion in a couple of months, you can’t buy now expecting to have more money in the bank later. This is especially important for commission based consumers who are not guaranteed a regular paycheck. Overextending your financial reach is always a bad move, so it’s best to avoid putting yourself (or your family) in that position.
How Many People are Living Here?
In a perfect world, everyone would be able to have their own bedrooms, but that’s not always possible or practical. However, more and more multi-generational families are in the housing market, and are looking for multiple main bedroom suites within the home. When thinking about this situation, consider how imperative it is to have sufficient space for everyone, and what it will do to your budget. Also, keep in mind how long you may expect to have a certain number of people living with you, if you need guest quarters, or must have the flexibility of multiple areas of personal space.
Overall, buying a home should be about your current needs with an eye toward how you plan to grow into space in the future–or on the other hand how you may eventually want to downsize your living area. Don’t buy big for the sake of showing off – in the end, you’ll probably regret it.