It’s a tough balance to strike, but I’d try to stay well below your cap as much as possible but without compromising too much on the most important stuff.
Things worth thinking about are:
– How long do you intend to live in that house and what kind of life do you plan on building in it? If you’re going to have kids, you do need to consider things like schools, daycares, walkability, safety, etc. as well as the structural stuff like number of bedrooms and bathrooms, potential to add bedrooms, etc.
– Resale. Eventually you will sell that house. It may not be for several decades, but whenever that time comes even if it’s your kids selling it after you’re gone, you want it to be a good investment. Look for communities that suit your needs but are likely to develop and increase in value over the years. Look for things like future developments on the books, especially things like transit lines, schools, parks, etc.
– Does it feel like “you”? This one might seem a bit silly but you’re going to live in this house for a long time and build a life there. You want it to feel right.
My fiance and I lucked out hard when we started looking. We literally bought the first and only house we looked at lol but we were also super narrow in our search with the intention of gradually compromising on the negotiables if we weren’t able to find exactly what we wanted.
We did spend slightly more than we had intended, but we were well below what the bank was willing to give us and slightly below what most guidelines state for what is a responsible amount to spend on housing. But it checked every single box.
It’s in a growing community with a future transit hub on the books right around the corner, a large yard, a double attached garage plus driveway, grocery store, pharmacy, restaurants, etc all within a few minutes walk. Brand new schools and parks (we aren’t having kids but we recognize the impact these things have to property values).
A big one too is an undeveloped basement. Our basement has the roughins for an eventual bathroom and logical space to put at least one bedroom, maybe even two or to turn the basement into a secondary suite. Developed basements bump property values nicely and we are handy folks so having that option to develop the basement eventually before resale is great!