Buying a House FAQ
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I've heard that I should buy as much house as I can afford. Is that true?
8. I've heard that I should buy as much house as I can afford. Is that true?
That depends on how much you can realistically afford. In the days when homes were appreciating by tens of thousands of dollars every year, stretching to buy a house was safe advice, given your ability to sell it or take loans out against it if temporary financial trouble struck.
With the market having flattened, however, you really do need to be able to afford the monthly payments into the foreseeable future, without taking potential increases in home value into account. The best reason to make a financial stretch in this situation is because you realize you'll be living in this home for a good long time -- and that if and when you sell, you want it to be a home that buyers get excited about.