Starter homes are generally on the smaller side, making them more affordable. They are sometimes referred to as "fixer-uppers" and might need to have a little maintenance done to ensure it's in excellent condition. One option you have with a fixer-upper starter home is to renovate the house over time and sell it at a higher price, making a profit. Of course, this also comes with risk.
On the other hand, forever homes can also be a great first purchase. They'll likely be bigger and more expensive than starter homes but can also be potentially move-in ready without the need for new renovation. Forever homes are great to purchase if you want to settle down and don't foresee any significant changes happening in your life that would make the house no longer work for you and your family. These homes are the ones you can see yourself still living in many years down the line and has enough space for a growing family (should you choose).
Now that you know the general difference between starter homes and forever homes let's talk about a few more things you may want to consider.
To decide which home is right for you, you want to look at your current lifestyle as well the lifestyle you’ll want to have in the future. If you’re thinking about buying a home, it would be a wise choice to stay at that property for several years to get as much as you can out of that investment. So, where do you see your life being in five years? Ask yourself this question and be smart about making a huge financial decision that you won’t regret later.
When choosing a home, regardless of the type, location is a huge factor. Suburban areas will likely be more affordable and give you more house for your money. Living in a city will be more expensive, and home options may be on the smaller side. It's something to keep in mind and be aware of while shopping around for a home.
Plan for The Future
Having a general idea for your future is the key to making the best decision for you. If you've decided you want to buy a starter home, have a plan in mind for what you're going to do when you're ready to move on to your forever home. Are you going to sell the house or rent it out for extra income? Likewise, if you think you're going to purchase a forever home, have a budget and a plan for how much you’re willing to spend on a house and be sure to factor in the higher cost of property taxes and homeowner’s insurance into that number.
Regardless, purchasing a home of any kind is an exciting life step. For low rates on home loans, Sikorsky Credit Union can help. Our home loan consultants can help match a loan to you based on your needs. To contact a home loan consultant, please click here
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Crone, E. (2019). Buying Your First House: Starter Home or Forever Home? - NerdWallet
. [online] NerdWallet. Available at: https://www.nerdwallet.com/blog/mortgages/starter-home-forever-home/ [Accessed 10 Jul. 2019].
Ericson, C. (2019). Should You Buy a Forever Home or a Starter Home? - ZING Blog by Quicken Loans
. [online] ZING Blog by Quicken Loans. Available at: https://www.quickenloans.com/blog/buy-forever-home-starter-home [Accessed 10 Jul. 2019].
Mastroeni, T. (2019). Are You Ready For A Starter Home Or A Forever Home?
. [online] Forbes.com. Available at: https://www.forbes.com/sites/taramastroeni/2018/11/14/are-you-ready-for-a-starter-home-or-a-forever-home/#5de5fff4a13c [Accessed 10 Jul. 2019].
First time home buyers have a choice to make. They can purchase a "forever" home with the intention of it being something that they can grow into and live in for many years to come, or they can purchase a starter home and save money or wait until their lifestyle requires it to move into a bigger house. Neither option is a bad decision; however, you may want to consider a few critical factors before you go ahead and make a purchase.