If you make $80,000 dollars a month, you can afford a house worth $300,000-$320,000 on average if you will pay in mortgages. This is what you can afford and still, it won’t put a toll on your daily life. Buying a very expensive house is a really bad idea and I will tell you why. Below are reasons why spending anything past $320,000 will be a bad idea.
Reasons Why Overspending When Buying A House Is A Bad Idea
- Initial payment. The down payment to buying a house is ten percent of the total price. Buying a house worth over $400,000 plus will mean that you part ways with half of your total income. This may be hard because you will need money to transport your things.
- Apart from that, you will need to pay monthly installments that are higher for highly-priced houses. To be able to do this, you need to start with a lot of money to spare.
- Once you move into the house, you will need a good sum of money to install various important appliances like air conditioners.
- If you are upgrading to a bigger house, you will need to furnish anew. If your house was smaller, definitely, you will not have enough furniture for a way bigger house.
- You will incur a lot of costs when you choose to spend more than half of your $80,000 salary to pay for the downpayment of your mortgage.
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