Pros and cons of buying a starter home.
As generations come and go, so do traditions and right of ways. When the Baby Boomer generation was moving into adulthood, it was common to buy a ‘starter home,’ often considered a modest, small property. As their families and careers grew, they moved into larger homes. These days, many individuals and couples struggle to come up with the down payment for a first home. They may even wonder if it is smarter to wait and save more money so that they can buy a bigger and better home to settle in. If you’re on the fence, here are some advantages and disadvantages that come along with buying a starter home.
- It builds stability quickly.
A great benefit that often strikes most people is the stability they feel when they become homeowners. They may feel more grounded, less constricted by landlord rules, and part of a larger community. Finally, they can call a property ‘theirs.’ Many new homeowners enjoy decorating, entertaining, and enjoying their own space.
- Builds equity.
Generally, when you get into your first home, you can realize some equity. If you can commit to a significant period of time, such as five to seven years, there’s a chance that you can come out well ahead. That is, if you keep up with home maintenance and improvements that add value.
- Buying twice means moving twice.
If you think you’ll be ready to upgrade in just a few years, it could be more cost-effective to save and stretch for the larger house. That way, you can stay in it longer without the hassle (and expense) of moving twice in a short period of time.
- You may spend more than you wanted to.
There are some definitive costs when it comes to homeownership, from property taxes, mortgage payments, to furniture, landscaping, and maintenance expenses. Some parts of homeownership are trial and error. If you’re not ready to be responsible for a load of expenses, you might be better off renting until you have saved up enough for a long-term home.
Contact Dean Rathbun when you’re looking to secure the right mortgage for your needs. We work with your credit score and financial picture to ensure that you lock in the right home loan to land that house of your dreams. Give us a call to get started.