If you’re looking to buy your first home, you might be stuck deciding between a starter home and a forever home. In general, buyers think of starter homes as affordable homes that need work and forever homes as expensive but in move-in condition. While there’s some truth to this generalization, Real Estate World Blog takes a deeper look at the pros and cons of each type may help you decide which is best for you.
A starter home is a home you plan on owning for a short period of time before buying another. While they’re affordable, starter homes tend to be smaller and usually need work. This isn’t necessarily a bad thing, especially if you’re a do-it-yourself-er. It also lends itself to future income possibilities, such as renting. If you’re going to make changes to your starter home, it’s easier to consider making changes that involve possible rental in the future.
On the negative side, starter homes may be more affordable, but that affordable price gets you a smaller home. Also, you have to know going in that you’ll be making repairs and upgrades to the home. Finally, a smaller home means a lower resale value. Also, you might not finish all the work that’s needed on your starter home by the time you sell it, so that lowers the value as well.
A forever home is the only home you plan to buy. You invest in a forever home because you plan on being there forever. This is where you put down your family roots for a generation or more. This also means that the stress of moving is gone. You and your family are going to be in this home for a long time, so you can settle in and enjoy. If you’ve always dreamed of a big family, make that dream a reality. You have the house and the space to make it happen.
As far as disadvantages, a big house in move-in condition means higher cost. Also, with everything looking shiny and new, you have to keep it that way. If something needs repair, it’s going to show. Your beautiful forever home is probably located in a beautiful forever neighborhood, too. If you want to keep up with the Joneses, you’ll have to keep up appearances.
Getting a Mortgage
Conventional loans are typically available through banks and credit unions. To qualify, you’ll generally need to have a good credit score and a down payment of at least 5%. FHA loans are insured by the Federal Housing Administration and are available through most lenders. They’re often a good option for first-time homebuyers because they have more flexible credit and down payment requirements. VA loans are available to eligible veterans, active duty service members and their spouses. These loans are guaranteed by the Department of Veterans Affairs and can be obtained through participating lenders.
Insuring Your Home
No matter what type of home you decide to purchase, home insurance is a necessity. It protects your home against damage and theft. Plus, all mortgage companies require it and you won’t be able to get a mortgage without it.
Also, look into a home warranty. Here’s how a home warranty works: Whenever something breaks in your home, such as appliances or your HVAC system, the warranty helps you cover the cost of repairs or replacement. Check your home inspection report and existing warranties to decide if a home warranty is worth it for you. If you decide it’s a wise investment, research the best home warranty provider for your needs.
The Choice Is Yours
Whether you’re debating a starter or a forever home, always consider your budget. Find a mortgage that you can easily afford, and consider a home warranty if you opt for an older property. The last thing you want is to start your homeownership adventure spending more than you can cover. We hope the tips above shed some light on which will be the best choice.