Should you go over your preset maximum cost for your dream home?

You’re in a bidding war and the prices are up to 20% over the original asking price. You’re about to hit your limit and your agent seems to think you can carry some extra financial weight. Should you go over your preset maximum cost for your dream home? If you did your research, you know exactly what you can afford, and you were looking in this price range for a reason. If you break your limit, how much further will you go? Personally, you will need to weigh this financial burden for yourself and be realistic about what you will have to give up in order to carry it. Chances are that there are other homes that you can be happy in, and you would probably get more value from a home inside your original cost range. If you went over your maximum limit on a home purchase, how did it affect you, and are you happy with that decision?

Mortgage rates barely budged from a week ago, according to the Freddie Mac Primary Mortgage Market Survey, even though reports have shown that the housing market is on the rebound with interest rates expected to rise.

The government-sponsored enterprise's weekly survey recorded the average 30-year fixed-rate mortgage this week at 4.02%, up two basis points the week prior. Nonetheless, the rate remained below the 4.14% figure reported a year ago, the June 25 press release with the survey results noted.

Conversely, rates for other loan types fell. For 15-year FRMs, the average rate dipped to 3.21% from 3.23% a week ago. The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage also fell by two basis points from the previous week to 2.98% from 3%.

And the one-year Treasury-indexed adjustable-rate mortgage rate fell more substantially to 2.5% from 2.53% a week ago.

Recent reports have shown that the housing market overall is strengthening, with both existing and new home sales on the rise. But with an interest rate increase expected, apprehension seems to be building, according to Freddie Mac chief economist Sean Becketti.

"Buyers appear anxious to purchase homes before the expected increase in interest rates later this year," Becketti said in the release. "Given the tight inventory of homes for sale, a 5.1-month supply at the current sales pace, home prices are being bid up."