A word of caution to home buyers when it comes to mortgages - forget the "approved amount" and look at the "required amount."
I remember a comment I heard once from someone who had just received a mortgage pre-approval letter.
I recall it went something like this..."Approved for this much? Now I can see why there are so many foreclosures!" The comment was meant to emphasize the point - the maximum level of approval may put a clamp on your future budget and lifestyle if you go for the maximum purchase amount.
The required amount is not the dream amount for the perfect home but rather the amount required to reasonably meet one's requirements in a new home. This is where a buyer needs to assess the "must have" characteristics of their target home. Sure 2,500 square feet would be nice but do you really need that much space if it means stretching your budget to its maximum?
Buying a home is not like being a kid going to the store to spend their allowance. Know all the numbers including the ones not in the purchase price before proceeding.
If you are considering a home purchase step one is to speak with a mortgage professional. In Brevard County, Florida give me a call and I will gladly provide several contacts with whom you can discuss mortgages and budgets.
How much you can afford today or next year does not speak to five or ten years out. There will be little things like replacement vehicles, kid's braces, college education expenses, an occasional vacation and more.
Home ownership is great but I caution buyers to not become house poor where most of your cash is tied up on your house!
Moderation is a good rule of thumb in most things in life.