“Starter Home” vs “A Forever Home”
Tips to help you buy your first home
There are so many emotions that come with purchasing a new home. From excitement, to fear, to feeling anxious and finally once it is all said and done, the feeling of relief! Overall, buying a new home can be a stressful and daunting process even for those buyers who have purchased homes in the past. At times, it may feel like a roller coaster, but it gets even deeper for first-time home buyers. From learning the home buying process, to establishing financing and finally deciding what type of home suits their budget and family needs, can be quite an overwhelming experience. Hiring the right agent, that specializes in working with first-time home buyers is essential. The top priority of an exceptional real estate professional is to put you at ease and take the time needed to guide you through the home- buying process.
So once your jitters have subsided and you have been pre-approved by a mortgage broker, now it’s time to determine what type of home you want to purchase. Should you go the route of “Starter home”? or “Forever Home”? Let’s define the difference:
A “starter home” is typically a smaller home, in a lower price range than you may have been pre-approved for. It may be a fixer-upper, for those that are handy and like to see the fruits of their labor. Or for those that are concerned about spending additional money in the home, they may decide to purchase a property that requires little to no work to avoid the possibility of encountering too many repairs at one time.
“Starter home’s” are a great purchase for single individuals or for young couples that may have just been married or have had their first child. This type of property may not have all the bells and whistles that the purchaser may want in their “dream home”, but it is a good way to get their “feet wet” as new home-owners. The goal for most people who decide to purchase a “starter home” is to eventually move on to a larger home that fulfills their dreams. While others truly love their “starter home” and choose to make it their “forever home”. Some buyers also look at their “starter home” as being a future investment property.
Some advantages of buying a “starter home” are as follows:
- Usually a lower purchase price than a “forever home”
- May take less time to save for a decent down payment
- Will perhaps be smaller than a forever home, requiring less maintenance
- Ability to start building equity sooner
Some disadvantages of buying a “starter home” are as follows:
- For couples that want to start a family, they may notice in a few years that they have out grown their home
- As with our current crisis, families are stuck inside. The home is over crowded with both the husband and wife working from home and the children are now being home-schooled. This could take a toll on the family dynamic.
- There may be less room for entertaining or having enough space for overnight guests
When buyers purchase a “forever home” it is usually in an area where they are planning to raise their family. Other than certain amenities in the home itself, they will most likely plant roots in an area where there is a good school district for their children to attend. This home is usually a larger and more luxurious home in a higher price-range. Everyone has a different opinion of what “luxury” means to them so there is no standard of what a “forever home” is supposed to look like. Everyone has different tastes and criteria so it will look different to everyone. This home typically comes equipped with all the amenities that the buyer seeks. And if for some reason there are a few things lacking, the homeowner will plan to add these comforts over the next few months/years. This home will most likely, see children grow up, grandchildren born and be the staple for family gatherings and perhaps be passed down to the next generation.
A “forever home” may be the buyer’s first and only home that they have ever owned. Or it may have been the result of several “upgrades” through the years. Either way once purchased the owners are in for the long haul.
Some advantages of buying a “forever home” are as follows:
- It may have all the “bells and whistles” and need minimum upgrades
- Will probably be a lot larger than a “starter home”. Therefore, having more space to entertain or work from home as needed
- No need to worry about packing up and moving for a long time
Some disadvantages of buying a “forever home” are as follows:
- Higher price range, usually requiring a larger down payment
- In the midst of saving for a down payment, buyer may miss benefits of the current market (i.e. low mortgage interest rates)
- Delay in building equity in the property
With that being said, everyone’s circumstances and needs are different. The choice to purchase a “starter home” or “forever home” is personal and should meet the needs of the individual or family that will occupy the home. This is one of the largest purchases that a person can make and everything should be considered. Do not spend more than you can afford. Staying significantly below your purchasing power is ideal. Never even “just look” at properties outside your price range. The danger in that is falling in love with a property that you can’t afford and then trying to figure out how to make it work. In the long run that can be costly.
To get started with your home buying journey, your next step is to contact a licensed real estate professional. Get pre-approved for a mortgage to see how much you can really afford and then have a blast shopping for your new home!