Buying a starter home

wife423

Thu, Dec 12 2024, 7:33 pm

Is it worth it to buy a starter home these days? Is the extra money going to the mortgage payments that you won’t get back make it not worth it to buy a smaller home to start out or is it better to just put money to rent and then buy your forever home when you can afford it?

Dh thinks it’s a waste of money to buy a starter home. He lived in one small home his whole childhood. The area he lived in is where young families buy their first home.

For reference, we live in the tristate area where even small homes are very expensive.

Genius

Thu, Dec 12 2024, 7:51 pm

Do you have money for a down payment?
What do you mean “extra money towards mortgage”? You mean interest?
When you pay rent the money is lost forever. At least with a mortgage some of it goes towards your own assets.
In my experience, if you have money for a down payment it is worth buying a starter home. When you want to upgrade later in life, you sell the starter home and you don’t have to start from scratch.

amother

Babypink

Thu, Dec 12 2024, 7:58 pm

Genius wrote:

I agree with this.
Extra money she probably means that the mortgage each month would be more than the rent she's paying now.

The house you buy now will go up in value, which would allow you to have a down payment for your "permanent" house if you sell it

amother

Orchid

Thu, Dec 12 2024, 8:04 pm

We just sold our starter home and used the equity we built up to buy our "forever" home.

One couple that came to see our starter home now is a family that has been living in their apartment for over 10 years. They have big kids already and it's getting squishy. They actually saw our starter home when it was on the market before we bought it 8 years ago but it wasn't perfect enough for them at the time so they passed. Now they are desperate to get out of their apartment but guess what? My house has doubled in value so now when they came to see it they feel like if they are spending that much money they should get more for it. But there is nothing more in this price range. My house was priced very fairly.

I believe if you have the money for a down payment plus a reasonable plan for your mortgage you buy a house. Real estate in jewish areas especially tends to keep rising and you'll always be priced out if you keep waiting.

amother

Dodgerblue

Thu, Dec 12 2024, 9:26 pm

amother Orchid wrote:

💯 this!!

amother

Latte ↓

Thu, Dec 12 2024, 9:28 pm

Owning is always valuable. You can sell later and make a profit, or you can renovate it. Anything is more worth it than throwing money down the drain when you rent. A mortgage is money towards owning property a massive asset and always worth it.

amother

Broom

Thu, Dec 12 2024, 9:31 pm

amother Latte wrote:

It may feel better to you, but it isn't always worth it. In some place, rent is so low compared to housing prices that it makes no sense to buy. Renting in that area allows you to put the extra money away in savings and have it for something in the future.

amother

↑ Latte

Thu, Dec 12 2024, 9:33 pm

amother Broom wrote:

Of course it makes sense to buy even if rent is low. Your property is often more valuable than the money you can save.

amother

Lawngreen

Thu, Dec 12 2024, 9:36 pm

It depends how long you would live in the starter house. Most of your mortgage payment goes towards interest the first few years, so you’re not getting much equity. Plus you have to pay a broker and other costs when you want to sell. So, I would only buy a starter home if I plan to stay 5 years minimum.

amother

Currant

Thu, Dec 12 2024, 9:43 pm

We bought a starter home. At the time we had only one child. We did a little work and gained experience as homeowners. When the next child arrived, we waited a few years and then realized that we were ready to move to a bigger place. Thankfully, our house had appreciated in value and we were able to get a larger house. It definitely made sense for us.

amother

Sapphire

Thu, Dec 12 2024, 9:46 pm

amother Latte wrote:

Of course it makes sense to buy even if rent is low. Your property is often more valuable than the money you can save.

Not with interest rates at 7%…. But thankfully they are coming down.

icedcoffee ↓

Thu, Dec 12 2024, 10:22 pm

We bought our home last year because it came out to be cheaper than renting, even though we don't plan to stay more than 5-7 years or so. The New York Times has a good calculator for whether it makes more sense to buy or rent for your specific situation.

amother

DarkRed

Thu, Dec 12 2024, 10:26 pm

We bought a starter home. It was a good move. But due to our personalities snd other factors we never moved on. In some ways I wished we’d stretched ourselves just a little to get a little more.

Ima_Shelli

Thu, Dec 12 2024, 10:28 pm

icedcoffee wrote:

Yes I came here to suggest that calculator.

amother

Yellow

Thu, Dec 12 2024, 10:29 pm

amother Lawngreen wrote:

This this this
You need to crunch the actual numbers

amother

Oxfordblue

Thu, Dec 12 2024, 10:31 pm

Always buy if u can. Real estate always goes up.

We bought our starter home 16 years ago for $330k, lived there for 14 years. Sold the house for 600k- the principle of our mortgage was very low at that point. Bought our dream house 2 years ago for 925k and our mortgage payments are a tiny drop higher.

I know today prices are much higher but if u live in the house for 8+ years it pays.