BUYING A HOME: HOLD OUT FOR DREAM HOUSE OR BUY A STARTER?

Posted by DB Wilson on Thursday, October 13th, 2011 at 1:54pm.

The prices are right for today’s buyer, and many consumers—especially those who have never owned a home before—are facing a buying dilemma. Should they take advantage of the times and buy a home now, even if they can’t afford the type of home they ideally want, or continue counting pennies until they can purchase their dream house?

The current market has been flooded with some of the most favorable mortgage interest rates in years. While it can take a long time to save for that perfect home, low rates make housing more affordable, which is why so many buyers are acting fast.

Buying a starter home, as opposed to holding out and saving up for your dream house, is a smart idea. If you purchase a starter home today, you can potentially begin to build equity that can lead to the purchase of a larger trade-up home in the future. Additionally, you might not need that dream home right now. If you’re newlyweds who plan on kids in the future, but don’t need that extra bedroom or huge backyard right now, then you will save money—through both a lower mortgage and easier upkeep—by starting with a smaller home and going bigger only when you need it.

By the time you are ready for that dream house, your finances will probably be in better shape—perhaps you will have switched careers or gotten that big promotion—so making a larger home purchase will be feasible.

Purchasing a starter home is a great learning experience. You will learn a lot about what you want and need with your first home—was that formal living room or office necessary? While that huge backyard looked great, was the upkeep affordable? Are you really happy with the location?

A starter home is a great jump-off point to learn what it takes to own a home, pay a mortgage, make important financial decisions and build equity. Once you know how to handle owning property, a more expensive purchase will be less stressful.  Of course, if you start with a home that isn’t your perfect fit, when you finally move into your dream home, you will appreciate it more.

For more advice on purchasing a home, please contact any of our RE/MAX of Boulder Realtors at 303-449-7000 or 1-800-825-7000, or RE/MAX of Boulder, Inc.

RE/MAX of Boulder, Inc. located on the corner of Canyon and Folsom, is nationally and locally recognized as one of the most successful real estate offices in the industry. Nationally, they are one of the "Top 500 Power Brokers in the United States" as listed in National Real Estate & Relocation magazine. Real Trends ranked them #1 in the Nation for Closed Sales Volume for 2010. Regionally, for the 4th year in a row, the company has been named the #1 RE/MAX office in America for Single Office Closed Volume. They can be reached at 303.449.7000 or visit http://www.BoulderCO.com. Connect with them on Facebook and Twitter, search remaxofboulder. Subscribe to their YouTube channel and see videos of all their homes for sale at http://youtube.com/remaxofboulder

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