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Start with your must haves and see where that leads you: Bed/bath/Garage and house size. Then if you are looking for good school or close to work that would further restrict your upper bound. But the self-employment part I would think make me to be more conservative unless it's well established with client base.
The thing about real estate is you can buy a $100k house now that will be worth $150-200k in 5 years.....or you could buy a $300k house that will be worth $200k-250 in 5 years. You don't really know what the market is going to do, but the location of the home and success of the local businesses make all the difference. Some states are plain out of control with their home values. A short 15 years allowed for some homes in California to quadrouple in cost, despite their size.
At the same time, some areas still never fully hit the same level of madness, so you can expect to find some deals without even getting a forclosure.
What you have to ask yourself: "Am I buying for investment(resell it for profit), or am I buying to own the asset?"
Consider that if you buy a home on a 30 year mortgage and can only make minimum payments, you'll be paying double the purchase price (or more) just in interest. My recommendation on how to compute what you can afford: Take a mortgage calculator and put in some numbers based on a 30 year, 15 year, and 10 year mortgage with the best interest rate you can find. Consider what you can afford if either you or your wife lost your job and had to 'get by' on the lesser of the two salaries. That's how you set yourself up to pay off a house quickly and still play the real estate market. Some say to stick to around 25% of your salary as where your payments should be. That's where I'm at on a 10 year mortgage and I'm comfortable with 9 years to go.
Now, you can always get a 30 year mortgage and pay it off quicker by doubling up on payments. That will keep your minimum payments low, but many credit unions will offer you in-house loans on a 10-15 year mortgage at lower rates. In-house loans are great because they won't be bought and sold through the mortgage networks. You'll have people you can talk with. I recommend checking out your local credit unions before jumping into the loan shark tank.
Expensive houses often have some growth in their values, but these days taxes and markets make it more difficult to move them if you needed to sell. In my area, houses sit on the market for an average of 120 days and that gives buyers the upper hand. You're going to be better off with a moderately priced home and move up to something bigger after you get most of it or all of it paid off. That way you'll be able to ride the market and ease into home ownership with less risk up front.
One word of advice, don't buy too much house unless you know about maintenance expectations. The larger the home, the more you have to do to keep it clean, painted, heated/cooled, yard mowed, etc... A lot of people will buy too much house and neglect to think it through just because they want to show off. Buy moderate and you may learn that keeping things simple will pay off lifestyle-wise and monetarily once you're only paying taxes & insurance. I expect to be debt-free with kids in another 8 years...which will allow me to buy a sports car to help me thorugh my oncoming midlife crisis.
How big is your apartment? Is it comfortable? If not, would one more 200- or 300-square foot room make a nice big difference? Honestly, I prefer smaller houses... for upkeep, utility, and coziness purposes. We are currently renting an 1100 sf apartment, and are feeling a little bit crowded... our most comfortable house was about 1700 sf. When we are ready to buy again, we'll be looking in the 1600-2000 sf range. If it were just my husband and I, we would be very comfortable with 1100 square feet.
it won't be you last house you ever buy. I would buy the best I could for the least amount. why be house poor. if you are payin 900 a month can you buy something that is under1500 bucks? do not buy so much of a house that you become house poor and stressed out because most of your income is going to pay the payment. just because we can qualify for a certain amount doesn't mean we should extend ourselves. look at it as a 5 year plan, then hope you sell and move up
How much house to buy? The real question is how much do you really need?
ditto above- why would you buy an expensive house just because you can instead of getting what you need?
You never know what could happen that could unfortunately change your situation. Whatever you decide to do be practical.
Stop for a minute. just because your husband is making "X" dollars an hour, that doesn't mean he's really making that as far as a mortgage lender is concerned.
Take his net income (after all expenses he deducts) from his 1040 for the past two years. Add together then divide by two. That is the annual income the mortgage company will allow him to use for qualifying.
So that $55 an hour might end up working out to $16 an hour as far as they are concerned. That will really make a difference in what you can qualify for.
I'd speak to a mortgage lender and get preapproved before you begin looking to avoid disapointment.
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