Starter Home: Should Your First Home be Cheap?
First-time homebuyers are often young, so they have a limited credit history, employment history, and savings. The Australian government, and related agencies, work with lenders to help those under the age of 30 become homeowners. Grants and fee waivers are offered to help reduce upfront fees, but the cost of the home is still in the thousands.
Whether a first home should be a starter or forever depends on the home loan applicant’s financial situation. In either case, you’re going to start building wealth. The choice comes down to comfort level. Lenders want to ensure a first-time homebuyers can afford their monthly repayments and still have enough leftover for other expenses.
Let’s look at three starter home benefits.
Build equity. As a renter, you don’t end up with a property to call your own at the end of a lease. As a homeowner, once your home is worth more than the outstanding mortgage amount, the difference in equity. Home equity can be leveraged by other financial products.
Less maintenance. A starter is smaller than a forever home. A smaller home means less maintenance per square foot. It will require upgrades, such as a new coat of paint, but the landscaping will be cheaper. You’re also going to incur lower utility bills.
Value appreciation. Starter homes are classified as fixer-uppers. Purchasing the home at its bottom value allows you to increase it through upgrades. For every dollar you invest, the value increases up to 75%.
Starter Home Conclusion
To finance your starter home purchase, get in touch with our Mortgage House loan specialists. We’re ready to explore your current budget and goals. Our online mortgage repayment calculator is available to you with no strings attached.