If you’re buying a home for the first time, you’re probably trying to decide between purchasing a smaller home to get into the market now or stretching your budget to get a forever home that you can stay in long-term.
Everyone has different ideas of what a starter home is, but in general, a starter home is something you’d be happy living in for around five to seven years. Eventually though, you’ll outgrow this home. A forever home, on the other hand, is one that you could see living in for the rest of your life, which means it meets most of the criteria of your dream home: the right location, the right size, and all of the extras you deem necessary.
Purchasing your first home is a huge decision, so here are some factors to consider as you weigh whether to get a home suited for the long haul or just short term:
What it all boils down to in the end is money and the market conditions. Mortgage rates fluctuate, so if the real estate market is booming, consider whether you should jump in before home prices get even higher, or whether they’ll eventually weaken.
Where you want to live
Would you be okay living in the suburbs for a few years if it means finding a home that’s more affordable? Or would you rather find a home in a different area where you would want to live long-term? If the location of your home is non-negotiable, a forever home may be better suited for you.
How much house you can afford
It all comes down to how much money you have saved for the down payment and how much you can afford to spend on the monthly mortgage payment. Keep a realistic amount in mind, and don’t stretch your budget too much.
What kind of house you want
If you’re after a single-family house with plenty of land, a forever home is more up your alley. But, if you’re daydreaming about a nice apartment, condo, or townhouse in an up-and-coming area, a starter home is most likely perfect for you. It all depends on what type of house fits your lifestyle.
The costs of getting out early
Although a starter house may seem like the way to go right now, don’t forget to look at the big picture. If you do spring for a starter house now and end up getting married or having kids or needing to move quickly, you may face some extra costs.