Do the Math
Figure out what percentage of your take-home pay will go to your mortgage-as a general rule, no more than roughly a third of your monthly salary should be spent on this expenditure. Then, factor in your living expenses, and determine how this potential purchase will impact your lifestyle. If you need to recoup costs and happen to have a large property, consider getting a tenant or a student rent a room to defray some of the weight of the mortgage.
It's What's Inside That Counts
Size does matter-when it comes to the square footage of your new digs, that is. Think about the day-to-day running of the house: if all the appliances, electricity and heating systems are older or outdated, they'll be less efficient and in turn more costly to maintain, plus may need replacement earlier. Also, dimensions of doorframes, hallways, and stairways can affect whether you're able to get that heirloom armoire up the stairs, or your new King-sized bed into the guest bedroom.
When buying a home, there are lots of extras over and above the cost of the property proper that seem to come out of the woodwork. These costs can add up quickly-as well as those that'll come up post-sale, like homeowner's insurance and annual property taxes. Remember that the final price tag on the home you'll buy likely won't include services like a home inspection, land transfer tax, and even standard fees for lawyers' costs. Investigate whatever additional fees might be applicable to your particular home-buying situation, and account for these in your total budget.