What is “Too much house” you might ask.
One perspective goes thus: The general affordability rule is that your monthly mortgage payments should not exceed 30% of your monthly income. That means if you earn $3000 per month, you should be able to afford to pay up to $900 in monthly mortgage expenses. The general rule takes into account the other recurring monthly expenses such as grocery, entertainment, utility, phone, taxes, giving, insurance, car maintenance… you get it, the list can get pretty long. From this perspective this individual may be able to afford to buy a $100,000.00 house assuming less than 3.0% interest rate with a 20% down payment.
If this individual bought the same scenario, another way you will have bought too much house will be if the $100,000.00 house has 3 bedrooms, but you live alone and never have a guest sleep over. Because the house is under-utilized then we can conclude that you have bought too much house.