How Much House Can You Afford in Your New Town?
Your job relocated. Or maybe you’re moving to your dream city and telecommuting to work. If houses are less expensive you might be able to afford a lot more. But if the housing market is more competitive in your new city, you might be left feeling a little cramped. You’ll need to know how much house you can afford, but there are some other things to think about before you get to that number.
Overall cost of living
Sure your house might be cheaper. But if you suddenly have to drive when you used to walk and your water bill’s doubled, are you really saving money? Think about how all your monthly expenses are going to change in your new town. If they’re a lot different, you might want to rethink how much house is right for you.
Do you love to travel? Are you an insatiable foodie? If you have expensive hobbies, you’re going to need money for them. Would you rather live frugally in a larger home or spend more of your income on fun? Remember, your monthly expenses are going to be more than just your mortgage payment.
If you’re selling your apartment in Manhattan and moving to South Texas, you’ll probably be able to afford a lot more space than you could in New York. But would that money be better spent paying off student loans, credit card debt, and your car? Once you’re debt free (and have something in savings) you can always remodel your current home or move to a bigger one home if you need to.