Fulfilling a lifelong dream of becoming a homeowner is exciting and rewarding. For many of us, this dream revolves around owning our forever home. While it’s good to stay focused on your goal, it may be necessary to take smaller steps to reach that goal by looking for a starter home instead. If this is your first home, it’s important to think about what type of house you should look for. Should you save longer to buy your forever home or invest now in a starter home? Here’s a few suggestions that you can consider while making your decisions.
Breaking Down The Differences
In order to make a decision about your home, it’s good to understand the pros and cons between a forever home and a starter home.
A forever home is a place where you plan to live for the rest of your life. A home in which you can grow old and center your entire life around. This can mean that your job is within a convenient distance from your home, there’s all the amenities you need nearby, the neighborhood is attractive for you and you’re ready to settle here for life.
However, a forever home is likely one that is large, with several bedrooms and bathrooms, and possibly even with a garage and backyard. Depending on what you envision as your forever home, these are typically more costly. This means saving up for a down payment will take longer than compared with a starter home. However, once you’ve paid off your mortgage, you will have built more equity than you would have in a smaller starter home.
On the other hand, a starter home is a good choice for a first-time homeowner or someone who is still uncertain about where they wish to live. These homes aren’t typically large but can be modified or enhanced to suit your preferences, making them more affordable.
This choice can also allow you to get a feel for different lifestyles. Maybe you wish to try living in a condo in the city or buying a house in a rural town. You can explore different options and neighborhoods without a serious financial commitment. This choice can act as a stepping stone to help get you to your goal of a forever home, as you will be building equity throughout the years you live in it.
Read: Designing a Home That Grows with Your Family: A Blueprint for the Future
Consider Your Finances
As always, a number one priority is to check your finances to create a budget for how much you can spend on your new home. As you might already be aware, buying a home includes more than just the cost of the house and you will need to prepare ahead of time for unexpected home repairs, property taxes, lawyer and real estate agent fees, and other expenses.. If this is your first home, a starter home is a good introduction to the homeownership life. It’s also a good way for you to enter the housing market without breaking the bank.
Consider equity, the portion of your property’s value that you own. When you buy a house, the equity of your home can increase in two ways:
- Paying down your mortgage: As you make mortgage payments, you’re paying off the loan balance, which increases your ownership stake in the home.
- Appreciation in property value: If the market value of your home goes up (appreciates), your equity increases because the difference between what you owe and what the home is worth becomes larger.
Once you decide to sell your home, this can be your profit which will give you more money to invest in a larger home. It can provide you with an advantage to move into a more expensive home or simply save money for yourself.
Think About Your Current Responsibilities
When deciding on your home, it’s natural to want to buy your forever home. But you need to consider your situation. If you live alone, the payment for the home can be costly and it may not be worth the financial risk. If you have a family to take care of, it might be wiser to buy a starter home to save money for other essential costs like education. On the other hand, your family may require more space, making a forever home a preferable option.
Consider your personal preferences in determining which home suits your lifestyle better. A starter home is easier to manage while also saving you money in the long term, but a forever home can give your family stability. Carefully consider the pros and cons of each.
Are You Satisfied With Your Current Neighborhood?
While you might think about which home to buy, it’s just as crucial to consider the location. When buying a forever home, you will be confined to that neighborhood for the rest of your life (or until you decide to move). This can be a bigger decision as you must consider if your home location has the amenities you need such as schools, hospitals, stores, gyms, or anything required for your lifestyle.
Once you’ve found the perfect place to settle, then you can make the choice to own a forever home. When you’re unsure about the location and whether you’d like to be in the same neighborhood for many years, then it’s worth going with a starter home. This allows you to figure out which type of neighborhood you would like to live in.
Read: Top 10 Factors to Consider When Choosing a Neighbourhood
Are You Ready to Settle Down?
The choice of which home you wish to buy can also depend on where you are in your life. It’s good to consider whether you’re satisfied with your job or if you’re feeling the need for change. Life is never predictable but it shouldn’t stop you from getting the forever home you want.
Each person’s life is different and it can be difficult to judge the best option for you. Understand your situation and whether you feel ready to settle down for life. Make a list of the negative and positive aspects of each type of home before deciding and consult with a trusted friend or loved one about the decision.
The journey to finding your forever home isn’t a race but should be considered well. Taking your time to figure out your life, location, and finances can be a long process, but in the end, it will get you to your main goal of one day owning a forever home.
Are you looking to enter the real estate market this winter? Give us a call today! One of the experienced agents at Zoocasa will be more than happy to help you through the exciting home-buying process!
