Buying a home is full of excitement and frustration. This significant investment in your future requires determining if you’re ready for your forever home or better off purchasing a starter home. To get a well-rounded view of the subject so you can make the right decision, real estate expert Mike Grossman shares the following insight.
What Is Meant by Forever Home and Starter Home?
A starter home is a property you expect to outgrow after a few years. This type of house gives you a foothold into homeownership by building equity, providing a stepping stone between renting and purchasing the home you intend to stay in for the rest of your life. Starter homes are less expensive, usually smaller, lack some amenities, and rarely new construction.
Your forever home is meant to be the last home you buy. Few first-time homebuyers can qualify for these more expensive properties. Purchasing a forever home means focusing little on resale value and property appreciation and putting attention on the accommodations and comforts. A forever home is one you are prepared to customize, expand, and renovate as your needs change.
How Long Will You Live There?
If you plan to settle in another location in the future, a starter home is the way to go. Experts recommend living in a house for five years to derive value and mitigate the extra costs involved in purchasing. If your family and career options all point you to remaining in your purchasing area, a forever home may be the right choice.
How Much Can You Afford to Spend?
Starter homes involve fewer upfront costs with a lower sale price and property taxes. However, a previously owned home may require extensive renovations. Forever homes cost more upfront to purchase and maintain but save you long-term because you won’t have to move again and can establish your network and business in a location. Take some time to review the local housing market to get an idea of median sale price and competitiveness so you have a good idea of what to expect.
Investigate all of your financing options to make a well-reasoned choice. Lenders check your income, employment history, and desired amount when you apply for a loan. Minimize your debts, build your savings, and monitor your credit rating to qualify for better loan rates and terms. Learn about the different mortgage types to understand which works best for you.
Keep in mind the extras you need to keep your house in excellent condition for living or reselling. Homeowners insurance is necessary protection that covers structural damage, on-property injuries, and theft. Another option to protect your appliances and home systems in case of breakdowns, purchase a home warranty. Home warranties are annually renewable and cover appliance repairs and plumbing, electrical, and HVAC failures. Deciding whether to choose a home warranty and finding the best home warranty company is easy enough when you practice due diligence.
What Could Be Your Resale or Income-Generating Potential?
Even if you can afford to purchase a forever home now, a starter home can simplify your life and create lifelong recurring income. You can invest money into the starter home and renovate it into a cozy spot for renters. A home purchase boosts your credit profile and puts you in a position to make larger purchases later.
Deciding on the perfect home requires meticulous planning and the right help. With expert agent Mike Grossman by your side, you’ll have someone on your team who can assist you in making the best choice for your family. Consider all the pertinent factors, such as local market and what you can afford, and ensure your homebuying experience leaves you satisfied and not full of regrets.
