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Should you Avoid Buying a Washington, DC Area Home at the Top of Your Price Range?

At some point while weighing the pros and cons of buying a new home in town, you begin to mentally fix on a price range. If you are able to depend on a family income that’s fairly predictable, the issue is simplified. If not (small business owners, entrepreneurs, and many sales professionals frequently find themselves in this category), finding an appropriate price range takes careful deliberation.
In most cases, buying a home will involve a mortgage, so lenders get to weigh in. Since, unless you are paying cash, it’s a imperative to seek preapproval from a mortgage lender early on, you can let a professional opinion help with the price range.
Let’s say the Martins have been preapproved for a $260,000 home loan. They have $20,000 set aside for a down payment, and are certain to clear another $20,000 once they sell their current home and retire its mortgage. So it’s good news: they can buy a $300,000 home!
It’s at this point in buying a home that the Martins can also decide to make a decidedly atypical decision. That decision would be to pick a number below their peak eligibility as the top figure in their price range, and to shop accordingly..
Maxing out your budget and purchasing the most expensive home you can afford is appealing. The math might tell you that you can afford the monthly mortgage payment, even if buying your new Northern Virginia, DC, or Montgomery County home puts you at the top of your price range. It can mean you get the space and features you’ve always dreamed of. However, there are some sound reasons why buying a home at the top of your price range might not be your best choice—
1. Additional Expenses
That mortgage amount alone does not take into account the other expenses and financial obligations that come with being a homeowner. Homeowners’ insurance and association fees (condo, HOA) can add to your regular monthly expense, as will property taxes—a considerable figure. If you are moving to a larger property, any maintenance and utility expenses that you’ve grown accustomed to might be greater (e.g., utilities, lawn care). If you plan on buying the most expensive home you can, those extra bills might be budget-busters.
2. Room to Renovate
Even if you’re buying your dream home, chances are very good that you’ll want to make a few changes to the new place. From fresh coats of paint to changes of carpets, appliances, or countertops, changes are a normal phenomenon after buying a home. Even if you’re pleased with the existing aesthetics, you might need additional furniture if the move is into a bigger space. Purchasing at the top of your price range can limit your ability to make needed changes.
3. Emergency Fund Savings
An emergency fund is a stress-relieving must for homeowners. When the refrigerator fails, the furnace needs to be replaced, or a busted pipe floods the bathroom, you’ll be relieved to have the extra cash. Even true do-it-yourselfers need to call for professional help occasionally. When you purchase a more affordable home, you’ll have extra cash to set aside for emergencies.
One of the greatest benefits of buying a home in our area is the sense of stability and security it brings (we know this market can be crazy!). Working with DC Metro Home Sales’ team ensures you will find a home in the price range you want and you will NEVER OVERPAY!

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