A reader wants to know when too much of a good thing is bad.

Question: My husband and I are looking for our first house. Of course, the prices are outrageous. Yet our rent is outrageous, too. So we’re seriously looking.

I don’t mind moving into a small “starter” home, but my husband wants us to “buy as much house as we can afford.” He says our money is better spent on a mortgage than sitting in a savings account earning less than 1 percent.

I’m nervous about sinking all our money into a house, but he says mortgages are considered “good” debt. We don’t have any “bad” to speak of, since our credit card balances are never more than a few hundred dollars and one of our cars is already paid off, with the other having just six months to go.

Is my husband right? I figure a place called Debt.com can tell me if mortgages are “good debt” and therefore a good investment.

— Anita in New Hampshire

Howard Dvorkin CPA answers…

Your question reminds of the sultry movie star Mae West. She famously said, “When I’m good, I’m good. But when I’m bad, I’m better.”

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Mortgages are the opposite of Mae West.

Mortgages are often called “good” debt for three reasons…

  1. Very few Americans can afford to plunk down $189,000 (the median price for an existing home) without getting a loan.
  2. Unlike, say, running up your credit card to buy fancy dinners, you spend more time in your home than anywhere else.
  3. Historically, home prices go up, making it the most profitable investment for average Americans.

None of those reasons matter, however, if you can’t afford the monthly payments. This was the very essence of the housing bubble that burst in 2007.

Let me hit you with something else that your husband probably isn’t considering: The cost of home ownership is more than just a mortgage.

Of course, everyone knows you have to maintain your house once you buy it, but now there’s a fresh new dollar figure provided by the real estate company Zillow

Nationally, U.S. homeowners can expect to spend $9,080 a year on average in hidden costs related to owning and maintaining a home.

Zillow divides “hidden costs” into two categories: “unavoidable” ones such as homeowners insurance and property taxes, and “maintenance expenses” that aren’t just fixing squeaky doors. It includes five-figure expenses like a new HVAC unit.

Interestingly, those hidden expenses fluctuate wildly depending where you live. Check out this map…

For argument’s sake, let’s suppose your husband factored in these surprising costs. My other concern is tying up all your disposable income in one place. Debt.com has previously reported that Americans are stressing out about their retirement savings, and other countries are doing even worse. The scariest headline I saw in some time was this: The World Is Running out of Retirement Money.

I haven’t even mentioned what happens if you don’t have an emergency fund. I’ve been a financial counselor for more than two decades, and I’ve seen bad things happen to good people with “good” debt. How will you afford to recover from an accident or an illness if every penny is paying your “good” mortgage?

I agree with you, Anita. Dream big, but buy small. Live frugally, and your next home may be the home of your dreams.

Have a debt question?

Email your question to editor@debt.com and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of Debt.com, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

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Article last modified on August 30, 2017. Published by Debt.com, LLC .