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Dilemma: Buy big or big enough

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Buying a house might come down to a choice: A big-enough house or the biggest house you can afford?

The choice you make affects not just your wallet, but your lifestyle as well.

Many considerations go into the house you buy and they are just as important, if not more so, than square footage.

According to the National Association of Realtors, the median size of an existing single-family home purchased in 2017 was 1,930 square feet, down from 1,950 square feet in 2016. Square footage in new construction also decreased slightly from 2,473 in 2015 to 2,419 in 2016.

Location is a big factor. If a house is just big enough, but close to work, it could be a better choice than the big homestead. Be sure to figure in the cost of a commute in time and money before choosing the larger house over the just-big-enough house.

Consider neighborhood. Older neighborhoods might have smaller houses, but they also can have stable housing values.

For example, buying new construction can be satisfying, but once newer houses are built in the tract, older houses can decrease in value. On the other hand, you still have a new house with all the security that implies.

One thing you don’t want to do is buy a house that is too small. Allow some consideration for guests or just a home office.

Think ahead to your future financial needs. Buying the largest house you can afford will lock you into high payments for not just a mortgage, although that is the most dramatic cost, but also higher utilities, taxes, insurance and repairs over the time you own the home. Some of those funds could be directed to retirement, for example.

Here is an example from the Wall Street Journal: If your smaller home saves you $20,000 each year over the life of the mortgage, you could invest that amount. That investment during the same time in a stock market portfolio making 4 percent could add up to a $1.2 million retirement fund.

It’s also possible to buy smaller but remodel over time. Pick a smaller home in a desirable neighborhood and renovate.

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