First Time Home Owner Series: Should a Starter Home be Your Dream Home?
April 19, 2023
Just because you can afford a 2,500-square-foot home sitting on an acre lot doesn’t mean you should buy it. When shopping for a starter house, some first-time buyers will get pre-approved for a mortgage and then shop based on the maximum they can borrow. If the mortgage company said they can afford it, then why not go for the home at the top of the budget? But doing that can create a bad financial situation if the homeowner is struggling to pay the mortgage each month or if all of the money is tied up. If all of your money goes to maintain your home, you may quickly accumulate debt.
Experts say it’s best to stay in the home you purchase for five to seven years to recoup the costs and to see some return on your investment. Purchase a property you can afford. Instead of going all-in with your first home, opt for a more affordable starter home that won’t break the budget and leaves room for entertainment or unexpected life expenses that will undoubtedly arise.