Story provided by Outbound Engine and Sharyl Pickens, Metro First Realty
Gone are the days when a three-bedroom, two-bath starter home was the norm for first-time homebuyers. Today, many buyers are skipping that stage altogether and going straight for their dream homes. They’re buying bigger, more expensive properties with upgraded features, and they plan to live there for the long haul.
Not sure which type of property you should look for? Here are a few things to consider:
Why are you buying?
Are you mainly looking for a way to lower your monthly living expenses, or do you want a place to raise your kids and put down roots? Do you want this to be your only purchase, or are you willing to go through the process again in a few years?
Is your family expanding or not? If you hope to add children in a few years, it may be a great idea to buy the bigger house now.
The answers to these questions will lead you toward a starter home or the bigger option. Make a “pros and cons” list and evaluate your goals.
What’s your budget?
Can you buy your dream home with what you can currently afford, or would that stretch your budget too far? It’s crucial to consider how much you’ll need to save for a down payment and how large of a loan you can qualify for. Your credit score and the expected interest rate will also play a factor.
Many loan programs allow a down payment to be gifted. If you have a dependable job and expect to advance in your position, you might be able to handle a larger payment, even if you don’t have excess cash for the down payment.
How long do you plan to stay?
Do you plan to be in the area for a long time or is there a chance you’ll need to move for your career, family, or another reason down the line?
No one has a crystal ball, but if you imagine yourself living off the coast of Alaska in a few years…purchasing a big house in the Midwest may not be your best choice!
Is the market favorable?
What is the current housing inventory, and will you be competing with other buyers? Favorable market conditions mean you’ll get more house for your money, making it an ideal time to purchase a forever home.
If you are wanting to get the biggest bang for your buck, consider buying as much house as you can comfortably afford. REMEMBER – you don’t want to become “house poor” – meaning, all your income goes to service your mortgage and nothing is left for “living” your life. Also, your monthly payment will fluctuate – usually upward – due to the increase in property taxes and homeowners’ insurance premiums.
When you are ready to purchase, consider all these things. You’ll be glad you did.