First-time home buyers have a lot of factors to take into consideration, including whether you want to buy a starter home or jump straight into your dream forever home. Below, AP3 presents a guide that can help you make an informed decision.
Pros and Cons of Buying a Starter Home
Your first home can be considered a starter if you purchased it with the intention of reselling it after a few years. The major benefit of a starter home is that they are at the low end of market prices. You will also save money by being able to choose not to make major repairs and renovations to your home. Finally, due to rising home values, you can probably resell at a profit or choose to keep the property and earn extra income by renting it out.
On the downside, starter homes tend to be smaller and in less preferred neighborhoods, causing potential discomfort during your time in the home and making the homes harder to sell when you are ready to move on. Starter homes also may not be in great shape, forcing you to put money and sweat equity into making them liveable.
Pros and Cons of Buying a Forever Home
A forever home is a house that you intend to live in for the next 30-plus years. The primary benefit of buying a forever home is that you can put down roots and never have to house shop and move again. Your home will be larger, giving your family room to grow.
Of course, the primary downside of buying a forever home is that it will be more expensive to purchase. You'll have higher mortgage payments during a time in your life when you may be just starting a career. In addition, you will need to pay for all the expensive renovations and repairs needed to keep a home healthy in the long term.
Tips for Affording a Home
Determining how much home you can afford is a critical step when buying a home, and the best way to learn your price range is to get prequalified with a mortgage lender. Lenders will review your current employment income, credit score, and other factors to decide how much they will let you borrow. Be sure to research multiple lenders and take advantage of government programs out there that can help first-time home buyers obtain a mortgage, including FHA, VA, and USDA rural housing loans. Many of these programs will lower the required down payment from a typical 20% to a more affordable size.
Finally, you can lower the cost of major home repairs by purchasing a home warranty. This contract, renewed annually, covers failures in your electric, air conditioning, heating, and plumbing systems. The company with the best home warranty will also cover repairs of major appliances. Buying a warranty would be in addition to purchasing traditional homeowner insurance, which covers property damage, theft, and injuries on your property.
Finding Your New Home
Choosing between a starter or forever home can be challenging, but the right choice will become clearer as you weigh the pros and cons. Contact a real estate professional for help deciding on whether to purchase a starter home or the home of your dreams.
AP3 provides aerial drone photography that can help set your home apart from other listings on the market. Get in touch today to learn how we can help you.
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