Housely
A starter home is usually a house that a young couple purchase shortly after marriage. They are in a hurry to get started settling into the idea of having a home and a family. They feel like they are taking the path that they are supposed to. The reason many couples have this idea is that so many before them have made the same mistakes and end up learning the hard way that this is not the best course of action if you want to invest your money wisely. Here are 10 reasons you should reconsider buying that starter home.
Limited Options
When you are young, there are simply fewer options available to you as a home buyer. There are several reasons for this. First, the amount of money that lenders will be willing to loan to first-time buyers is significantly less than experienced home buyers. There will be very few houses in the price range that new buyers will be able to purchase. In many cases, the lower priced homes have serious issues that would prevent first time home buyers obtaining an FHA loan for that particular purchase. FHA will not insure a home purchase if the house has documented structural issues including illegal additions. Illegal additions are common in starter homes because the previous occupant outgrew the house and decided to add on to it for a small amount of money.
Housing Is Less Affordable
Housing in the United States is priced too high for young people to be able to afford right now. Prices are at record highs and will probably stay at these rates for some time. Buying more house than you can afford will put you and your family in a long term, serious financial bind. The last thing you want to do is to put a burden on yourself to be able to keep a roof over your head.
Repairs
In many cases, starter homes are in need of many repairs. Starter homes have a tendency to be older and with age come issues such as structural integrity and roof repairs. These repairs can cost a small fortune. Many young people do not stop to consider how costly potential repairs are. This can put young couples in tremendous long-term debt.
Necessary Upgrades
In most cases, starter homes need to be upgraded to be able to support today’s style of living. The technology and design of homes decades ago are not suitable for the average young family. Upgrades are costly and put a strain on finances. The option of not upgrading will leave new home buyers with a bad taste in their mouth and lead to buyer remorse. This is a factor that most first time home buyers overlook. In many cases, home buyers start with one project and move to another not realizing that they are overextending themselves. This puts people in a position of doing without later on.
Short On Space
First-time home buyers may not have children at the time that they move forward with purchasing their first home. Later on, if children are in the equation parents find themselves with a serious lack of space. If more children come into the picture, then many will find themselves in a situation that they can not easily remedy.
Upkeep
When first-time home buyers consider buying a home, many times they do not factor in the steep cost of upkeep for a normal house. This is not even considering the home is older and may require much more upkeep than other newer models. The upkeep of a newer home is quite expensive. When you consider maintenance, yard upkeep, small repairs, and appliance maintenance you start to come to high figures that would surprise younger buyers. It is crucially important to figure in these costs so that you do not get caught off guard later.
They Do Not Retain Their Value
Most starter homes do not have features or location that will help sustain their long-term value. Though you may feel that your home may be a great home at the time, years later when you are ready to purchase a better home you may not be able to get a great return on your investment. Starter homes are not a great way to protect your money or grow your assets. They can become a burden when you are ready to sell.
Not A Good Fit For Long Term
In most cases after a few years, you will want to upgrade to a bigger, better residence. If you are in a starter home, some of the previously mentioned issues can have you trapped in a situation that you can not immediately resolve. When you buy a starter home, you may be putting yourself in a situation that you will regret later on. It is best to wait until you can buy the house that you can grow in to. This is hard for some younger individuals that are eager to get their adult lives on track. However, this strategy can derail your plans for the long term.
Higher Interest Rates
Younger adults usually do not get the optimal rates that older more established people will get when purchasing a home. This is because older individuals have had more credit experience and a chance to build strong credit. These are factors that lenders consider when loaning money. Though you may be able to obtain a loan, the interest may cost several thousands of dollars based on your lack of a credit profile. It is best to wait a while and then see what types of offers you can obtain.
Make Moving Very Difficult
Once you are committed to a starter home, you may be locked into your residence for some time. You need to consider that your life can change drastically over a couple of years. If that happens, you may be required to move. If you are paying on a house and need to sell that will take time. It could even take years. Most couples need money from the sale to buy a new home . Otherwise, they will not only be renting elsewhere but also make their mortgage payment. This can be devastating for a family.
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