Your home is likely the biggest purchase you’ll ever make. If that fact alone doesn’t stress you out, buying one might, especially if you're trying to retire comfortably.
It can be hard to determine if a house is too expensive, too cheap, or just right. However, this decision can impact your finances for decades so it's pretty important you take the time you need to figure out if you're making a good decision.
Here are 10 signs that the dream house you want is too expensive.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.
The price is more than your pre-approved mortgage
There’s usually a reason your lender pre-approves your mortgage for a certain amount. Lenders consider financial factors like income and debt when they make lending decisions.
As a result, your mortgage pre-approval amount is usually pretty spot on for your finances. Some people choose to spend less than their approved amount. But if you need to pay more, the house is probably too expensive.
You can always get out of debt before applying, or save some more and re-apply in the future for a different home.
The property taxes have you concerned
There are a lot of numbers to consider when you buy a house: down payment, purchase price, HOA fees and closing costs. With so many numbers floating around, the property tax payment amount can often get lost.
But even though you may not see the property tax listed on the information about the house, you need to consider it before you buy. If the tax is too high, then the house probably isn’t for you.
The housing costs are significantly more than 30% of your income
A general rule is that housing costs should be 30% or less of your monthly budget. Some people love this budgeting guidance, and others disagree with it.
But regardless of where you stand, you probably don’t want your housing costs to be much higher than 30% of your income.
Once you start stretching to 40% or 50%, having enough money left over for the other things in your life can be challenging, and you might even go into more debt.
Resolve $10,000 or more of your debt
Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.
National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1
How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.
The house needs a lot of work
A lot of people love a fixer-upper. There are entire broadcasting networks dedicated to the process of fixing up homes.
But most of those shows usually don’t show the financial aspect of redoing a whole house. The costs can add up quickly, and unless you have a separate budget for updates and repairs, a place that needs a lot of work is probably too expensive.
The last thing you want to do is get into a home that causes you to pick up extra money with a second job just to make the payments on the work that you need to do.
The price is already at the top of your budget
If the house is at the top of your budget, it can be tempting to think you can make it work. But there are a lot of extra expenses to consider before you even move in repairs, furniture, HOA dues, moving costs, property taxes, and more.
Suppose the house you want is already at your maximum price point. In that case, there probably won’t be enough room in your budget for other necessary expenses related to the move.
Trending Stories
Your budget can’t accommodate the HOA fees
Some people love living in a neighborhood with an HOA; others hate it. But if you’re considering a house with an HOA, you want to ensure that you can comfortably afford the fees.
On average, HOA fees are between $200 and $300 per month. If those fees don’t fit your budget, the house is probably too expensive for you.
You need to pay more than the asking price
Depending on the housing market, you may or may not need to go over the asking price to buy the house you want.
If your housing budget and mortgage loan can accommodate it, there’s nothing wrong with bidding over asking, as long as you can still avoid potential money problems.
But it can be a slippery slope, and you might bid more and more to win the house. If that’s the case, the house can quickly become too expensive.
The house will be expensive to maintain
Houses require a lot of maintenance. Whether it’s appliances, home repairs, or the backyard, at least one item usually needs attention at any given time.
But some elements, like pools or big backyards, can make a home even more expensive to maintain. The house is probably too costly if you can’t afford the upkeep.
You need to increase your down payment to make it work
It can be tempting to increase your down payment to keep the monthly mortgage payments, expected repairs, taxes, or other recurring costs associated with a home affordable.
But if you find yourself in that position, the house might just be too expensive. If you’re like most people, you worked hard to save up your down payment and want to get ahead financially.
You might regret increasing your down payment unless you can lower your monthly expenses too. Even then, you don’t want to tap out all of your savings just to afford the home.
Earn cash back on everyday purchases with this rare account
Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2
With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!
This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.
Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.
You might have to take on a second job to afford it
Even if you try to keep your feelings under control, buying a house is an emotional process. Suppose you find yourself trying to stretch your budget or considering a second job to make the mortgage payment work.
In that case, the house is probably too expensive for you. While it can be helpful to work a side hustle during specific periods when you want to save more or pay down your debt.
You'll want to eliminate this unnecessary money stress before you're stuck working two jobs forever.
Bottom line
Even though it might be disappointing to discover that a house you want costs too much, it’s always better to know before you buy.
The last thing you want is to buy a home only to have to sell it again shortly. Take these factors into consideration and keep looking.
You’ll find the perfect fit, but while you house hunt, consider making simple money moves to better your finances.
Lucrative, Flat-Rate Cash Rewards
FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.
Wells Fargo Active Cash® Card
Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases
Benefits
- Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Cell phone protection benefit (subject to a $25 deductible)
- Can redeem rewards at an ATM for literal cash
Drawbacks
- Foreign transaction fee of 3%
- No bonus categories
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 19.49%, 24.49%, or 29.49% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
Subscribe Today
Want extra-cash moves to come right to you?
Stop browsing endlessly. Get proven ways to earn pocket money, help cover rent, and crush your debt — sent to your inbox daily.