Your Starter Home vs. Your Forever Home Buying

A new home you own is exciting even if it is "co-owned" with the bank. Most people have visualized their dream home—large, inviting kitchen; multiple bedrooms for family and guests; perhaps a backyard with built-in BBQ, pool, and fireplace. Yet this dream is often out of reach financially for first-time homebuyers. These buyers are ready to find a starter home and perhaps are wondering if saving for a forever home makes more financial sense. Before making this decision, it’s important to consult with a professional financial advisor about your unique situation; more often than not, getting a starter home makes the most sense. 

Location, Location, Location, that is the three main ingredients right? Well maybe just being in Santa Cruz can smooth over the fact that you can not get a home in your favorite neighborhood right now. I often counsel people to look outside of the most popular areas to get a foot hold in the market. For example a couple I worked with four years ago bought in Boulder Creek, they did not like it but they did like their neighborhood and they did like the house. They remodeled and saved and made $85,000 in equity in 2 years. They used that to buy in the area they did want to be in. I often counsel buyers looking in our area to know what they can live without, a starter home probably won’t have all the features you dream about, so it’s important to understand the difference between “want” features and “need” features. For instance, the number of bedrooms might be more critical than the huge, eat-in family room- kitchen. Finding a home near a park for the kids might take precedence over an exclusive neighborhood. Focus on affordability and find a home that suits not only your immediate needs but offers the ability to grow in equity. Your starter home should be viewed as a financial tool to build wealth and position you to move up to your forever home. Building wealth through home-ownership is a great way to ensure you’ll be able to buy that dream home when you’re ready.

Posted by Michele Replogle on


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