First Home Buyer Conundrum: Starter or Family House?
When you set out to buy your first home, you may think you know what you want. But, when you look at the cost and considerations of the differences between a small starter home and a larger property built for families, the answer is not always so clear.
Today’s Career Wealth Building blog is for aspiring homeowners trying to decide which type of home makes the most sense.
Your Mortgage Rate May Help You Decide
Mortgage rates change often, and the best mortgage rates today may not be the same as tomorrow. When mortgage rates are high, that family home that you’ve had your eyes on might be too expensive. The lower cost of a one or two-bedroom property is much more manageable, even with a higher interest rate. You also need to know the difference between an FHA, VA, and conventional loan.
Know Your Immediate Plans
If you plan to start a family immediately, buying a bigger property might make sense so that you are not disrupting children five years down the road. However, if you are still focused on your career and aren’t quite sure where it will take you, a smaller house might be the way to go. Keep in mind that the average age to buy a first house is 47 years, which is up from 31 years in 1981, so don’t feel pressured into establishing an estate until you are ready.
It May Be More Expensive to Insure a Larger Home
There are many different factors that go into the cost of home insurance. Fortunately, your insurance agent can give you a quote based on the address of the home before you buy. Usually, a larger home is more expensive, and this can increase your mortgage. Insurance, however, is not the only added expense, and, depending on the age of the home, you may be left with a huge bill if your refrigerator, plumbing system, or HVAC breakdown. Since insurance only covers structural damage, you’ll want to research finding the best home warranty company for a renewable contract that covers these and other potential surprise expenses.
A Handyman (or Woman’s) Touch
If you’re handy, you may be able to save money buying a home that needs a bit of elbow grease. Installing carpet in one small room or fixing a few broken deck boards can save you thousands of dollars. However, if your home needs extensive repairs, such as hardwood floors throughout, it’s usually best to call in a professional, which can add to your expenses.
Location May Change Your Mind
Not all large homes are in “good” neighborhoods, just as not all small homes are in impoverished areas. Before you make a decision, know where you want to live first. Raleigh Realty explains that location is an important factor, and you may want to consider the school zone or access to public transportation. Remember, you are not really buying a home but property in the neighborhood and access to the amenities within it.
To recap, there’s no single answer that makes sense to all homeowners. Everything from your mortgage rate to the location will matter when it’s time to choose between a large and small property. You also have to take into account the cost of home insurance, home warranty, and repairs that you can make yourself or not. For the best advice, contact your mortgage agent and realtor to get a better idea of the current market in your area and for insight into the best neighborhoods that fit within your budget.
If you are thinking about starting a career in real estate, keep your eye out on the Career Wealth Building blog for insight into the market and more.