My co-workers (mostly younger)told me to buy as much house as the bank will loan you because the price of houses would go up and your salary would go up. I bought a house that was half of what the bank would loan me. My youthful co-workers are in trouble now. There’s lots of people who intentionally overbought. Now, they want somebody else to bail them out. I would have liked to have that mansion overlooking the valley and then have someone else pay for it. What happens when you reward poor decision-making?
My wife and I were pre-approved for something like $250,000 when we went shopping for our first home some 20 years ago. We ended up finding a three-bedroom ranch for $92,500 that was a real fixer-upper. But we were overjoyed to have a home that actually cost us less in monthly mortgage payments then what we were previously paying for rent and didn't mind at all that everything needed updating.
Over the next five years, we did landscaping, windows, doors, siding, roofing and a whole lot of painting and remodeling on the inside and had that house looking like new. I mean, we did EVERYTHING to that house. It ended up being a great experience because we got a real education on how to fix things around the house and that served us well in future years. We ended up selling that home at a nice profit and got a much larger home with a very affordable mortgage that we are just about done paying off.
Young couples should always get a fixer-upper as opposed to a home where everything is updated and brand new. You can afford much more house that way and it is better to fix things when you are young and still have the energy.