Should First-Time Home Buyers Get a Starter Home or a Dream Home?
Posted Thursday, June 27, 2013
Even though you’re a first-time home buyer, you may want to skip the starter home and drive straight to your dream home.
Due to lower housing prices and interest rates, you may be able to afford (or at least qualify for a loan for) your dream home. But that doesn’t mean it’s the right move for you.
What is a starter home?
A starter home is a home that is less expensive than the average home. It’s usually less expensive because it is smaller, older or a fixer-upper.
What are the benefits of buying a starter home?
If you’re struggling to let go of your desire to own your dream home right now, consider these benefits of buying a starter home:
- It’s easier to qualify for a smaller mortgage.
- You can stop paying rent and start investing in your own home sooner.
- The down payment you have to come up with is smaller.
- You don’t have to pay for Private Mortgage Insurance (PMI), if you have a large enough down payment.
- Your closing costs and property taxes are lower.
- You have lower monthly mortgage payments.
- You have more money to spend furnishing, decorating and maintaining your home.
- Your utility bills are lower.
- You’re more financially flexible, which greatly decreases stress.
- You can build equity towards your dream home.
- You discover what you really want in a dream home.
Half the fun of your dream home is imagining it. Continue to do that while enjoying your starter home and all the benefits that go with it.
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