re: Opinion on buying a larger home within budget - sacrificing location.

I was in a very similar situation to you recently. We bought the new house. Now we have a rental property that pays for itself and the home we want.

Your take home pay to mortgage costs appear reasonable. I’d consider it.

However, we were able to lock an ARM at 3.25% over the summer, so knowing we were not getting destroyed on interest rate helped us make the decision. I doubt you are getting an ARM anywhere close to that now.