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Is it stupid...
Hello everyone, I've never posted on this board but was hoping I could gather some of your expertise.
My husband and I are preparing to buy a house in the Midwest. We found a cute little house with three bedrooms, three bathrooms, and a great backyard (minus a fence, so we'd have to take care of that somehow)
The only foreseeable (we haven't had it inspected yet, we're not that far along) problem is that the two bedrooms downstairs are kind of small. They'd be great for little kids, our first baby is only 7 months, but they'd be harder to fit them as they got older.
So... Is it dumb to buy a starter house? Or should we go for a place that we're more likely to spend many years or possibly forever in?
This may seem like a stupid question but starter homes make me nervous. 24 years ago my parents bought a starter home and that is still where they are. My husband doesn't mind the prospect though, so I figured I'd ask.
Re: Is it stupid...
I wouldn't say that it's stupid to buy a starter house. Have you tried out one of those rent vs buy calculators? I don't know of a good one to recommend, but it might help you figure out how long you would need to live in the house for it to be financially efficient. If you could stay there for 8 - 10 years it might be great for you.
One thing I would say for a starter home is that personally, I would only do it if I could put 20% down so that I could build equity faster. I would be concerned about being able to get enough cash out of it when it came time to buy up.
H and I went in with the mind set that we were going to buy something we *could* stay in forever if we needed to. Size was a huge factor in that equation so I definitely suggest carefully considering how much you want, especially since it sounds like you plan on growing your family in that time. If might be worth sacrificing something like an upgraded bathroom or kitchen that you could do yourselves eventually if it means more space.
The current recommendation is to be in your house for at least 7-10 years just to recoup the buying and selling costs (don't count on additional appreciation)
If that is OK with you - then go ahead and buy.
I am not a fan of starter houses. The housing/mortgage markets are not going to change much in the next few years. You have time to save more, look more and get what will work.
Just how small is a too small bedroom? Is there a way to be creative with space, limit furniture etc?.
Hint: Older kids tend not to play in their rooms (at least mine didn't) - they just sleep there so you really do not need more space - perhaps even less space is OK.
Unrelated question, but something to consider...does it bother you to have your kids sleeping on separate levels of a home than you and DH? When you said that two bedrooms are together and therefore the third is separate, it made me wonder.
Are you okay with trudging up and down stairs to tuck them in, get a glass of water, check for monsters, and be available in case of nightmares? What happens when they are sick? Also, do you feel safe being separate from your kids at night...I'm thinking worst case scenario, fire...burglar...bad storm...
Personally, this would bug me. Just wanted to point that out...
It's not stupid to buy a starter home. Do you have the money to buy a larger/forever home? I think most people buy a starter because that's what they can afford at the time. If we could have afforded a larger house, we would not have gotten a starter home. We planned to be in our starter home for 5 years. We even got a 5 year arm loan because we really intended to move. Then when the 5 years were up, our interest rate actually went down! And then it went down again the next year! Obviously we just lucked out because of the ecomomy but our 5 year house turned into a 7 year house. And, we only moved after year 7 because DH got a new job out of state. So I do believe a lot of people buy with the intention of moving but never do. Considering the ecomomy, if you have the money for a larger home, I'd personally go that route.