Your first home :: Starter or forver?
Congratulations, you’re about to buy your first home! Like any new adventure, home buying can be both exciting and a little scary. There’s so much to do and so many decisions to make. Just remember, nearly every single person who owns a home started right where you are now. If they can do it, so can you.
Should You Buy a Starter or Forever Home First?
Why a starter home makes sense:
the Right Price. This is important if you think your financial situation could fluctuate or you don’t have enough for a down payment on a more expensive home.
Low Taxes. Property taxes are less on a smaller home with a lower appraised value.
Less maintenance. A smaller home involves less upkeep. You can save for your dream home by not spending money on upgrades like appliances or flooring in a home you don’t plan to stay in for very long.
Why a starter home may not be a good idea
Feeling like temporary housing. You know that in a short time you’ll have to leave neighbors, schools, and local businesses you may have come to enjoy.
Repairs An older home means older roofs, appliances, and HVACs. It might be a good idea to purchase a home warranty to save you some costly repairs while you’re there.
Resale. It’s harder to sell a smaller home in a less desirable area and you may not get the percentage out of it you wanted if the property value decreases in your area.
Why a forever home makes sense
Customizing. Customizing your home without having to weigh the resale value of those upgrades.
The size you need. A larger home means you won’t be cramped when your family grows.
Roots. Knowing you’re there to stay allows you to put down roots.
Why a forever home may not be a good idea
Costs. The higher price will mean higher down payment and closing costs.
Upkeep. A larger home means higher maintenance and repair costs.
Equity. It will take longer to build equity.
Finding a Mortgage
This can seem pretty intimidating to the uninitiated, so if you’re unfamiliar with the intricacies of mortgages, a good place to start is getting acquainted with the basics. In order to qualify for a mortgage, you’ll need a satisfactory credit score and salary so that your lender is confident you can afford the monthly payments.
Next, figure out how much you can spend on a mortgage to determine which option you can afford. Research and familiarize yourself with available mortgage rates, whether you're taking out a conventional, FHA, or VA loan. Use a mortgage calculator to get you in the ballpark of what you can expect your payments to be. Contacting the lender directly will give you the most informed answer, though.
Considering Moving Costs
Moving expenses can eat into the money you’ve saved for your down payment, so having a close-to-exact number can save you disappointment if you find you don’t have as much for your home as you initially thought you would. Reliable and professional movers will be able to give you a fair quote. Before meeting with a moving company to get a quote and discuss your needs, you can evaluate companies by reading reviews online.
No Regrets!
Once you’ve finally purchased your home, you don’t want to immediately suffer from buyer’s remorse. That’s why making sure you choose the home that’s right for you now will make the difference in how well you’ll enjoy living there.
For instance, if your children are unhappy with their school, or if you’re struggling with just getting by because of monthly costs draining your finances, it’s going to be hard to be happy with life in your new home. It’s important you weigh all the pros and cons, make a list of must-haves vs nice-to-haves, and think about what you want your home to be, a long-term investment, or a stepping stone.
Once you’ve figured out how much you can spend on a mortgage, determined your desired lifestyle, and gathered all the necessary information, you’ll be able to enjoy life in your first home with no regrets.
At BRC Real Estate, our years of experience allow us to find you the perfect Denver-area home. Call 303.495.2212 to get started!
Article Written by: Alice Robertson @ TidyHome.com
