According to statistics, as many as 34% of homebuyers in a year are first-time buyers. If you’re part of this group, you’re on an exciting journey to homeownership. Still, the road can be long and complex, with many difficult decisions along the way. One of these decisions is the choice between buying a starter home and investing in a forever home. This is a quandary that has stumped many first-time buyers. Here’s some information from Farms & Estates Realty to consider about the pros and cons of each before making the jump.
Starter Home vs. Forever Home
There are plenty of reasons why it may be best to opt for a starter home first. Though this home is typically smaller, it’s also likely to be more affordable, and it may demand less upkeep than a larger home would. If you choose a fixer-upper, you’ll also have to contend with repairs, and it may be harder to sell than a bigger, more desirable home.
A forever home has its own pros and cons, too, including more space — but a higher cost. A forever home will allow you to put down roots and avoid moving again, but it will also require more upkeep than a smaller home would, which can translate to higher costs. If you plan to expand your family, though, investing in a forever home will offer more room to do so.
The right choice ultimately depends on your priorities, then. Is it important to have space for a family, or is it important to stay at the lower end of your budget? If you’re still struggling to decide between a starter home and a forever home, make a list of your own personal pros and cons to consider.
Determining How Much You Can Afford
For many homebuyers, budget is the determining factor in their decision. Even if you decide to opt for a forever home, you’ll be subject to the constraints of the mortgage you’re approved for. Before you start searching for a home, it’s a good idea to research mortgages and see how much you can afford. A lender will review your credit history, employment, and debt-to-income ratio to determine your approval amount.
Remember that you shouldn’t necessarily shop at the top of your budget. Even if you are approved for a high enough mortgage that you can afford to splurge on your forever home, you should carefully consider whether you want to commit to monthly mortgage payments in that amount. It may reduce stress and make moving more comfortable if you opt for a smaller starter home instead.
You should also do some research to better understand the average home prices in your desired area. You may find that your budget is incompatible with your target area, but in many cases, you can widen your search to find more affordable homes. Expanding your search may reveal some hidden gems that you wouldn’t have seen otherwise. Be sure that your prospects fit within the bounds of any prequalification you have.
You may also have a circumstance where you need to move into an area despite not having found a home to buy. In such cases, it’s wise to research what your rental options are in the area. It may not be the ideal situation, but finding a rental will allow you to move to the area and develop more familiarity with it. From there you can continue searching for the right home to buy.
Find the Right House for Your Budget
Before you start house hunting, it’s important to consider how much you can reasonably afford. You should also research local home prices and familiarize yourself with lenders’ criteria. This knowledge will equip you to enter the real estate market with confidence and find the right home for you — whether it’s a starter home or your forever home.
Written by Suzie Wilson
Suzie Wilson is an interior designer with more than 20 years experience. What started as a hobby (and often, a favor to friends) turned into a passion for creating soothing spaces in homes of every size and style. While her goal always includes making homes look beautiful, her true focus is on fashioning them into serene, stress-free environments that inspire tranquility in all who enter.