Your method is ok BUT extract brews are notoriously difficult to get an accurate gravity reading on before fermentation because it is difficult to get the concentrated wort and top off water mixed thoroughly enough to for a uniform solution.
Your method runs the risk of adding too much or too little top off water depending on if you happen to sample a more or less concentrated bit of wort.
As the others have suggested, just top off to the volume specified in the recipe and you will be fine. The given amount of malt extract with the specified amount of water will give to gravity specified in the recipe, regardless of what the hydro says.
You're method will make beer, but introduces the potential for error I think you're trying to eliminate.
Welcome to the hobby, and the site