Which One Should You Go With, Your Dream Home or a Starter Home?

Buying a home is a major financial decision. And for many, it is a one-time buy. So it would be best to decide whether you want to go all out and spend a fortune or spend within a limit and get a starter home. This guide will help you in making the best choice. It will shed some light on the factors you must consider before buying a home.

What is a Starter Home?

Before we understand which of the two is better, let’s consider what each of these houses offers. A starter home is the first home people buy. Most people borrow a Home Loan to fund their purchases. And they must know how to use a Home Loan calculator to ascertain their loan expenses.

Using a House Loan calculator to calculate the loan expenses will help you manage your expenses within your budget.

Starter homes are usually small. They are not lavish and don’t have many fancy amenities that you might find in a larger home. However, there are a few great things about a starter home, such as:

• Starter homes are affordable
• You don’t have to save up all your life to buy a starter home, as you can work your way through with a small down payment 
• You can build equity in the property you buy and save money
• The EMIs can be as low as rent payments 

What is a Dream Home?

As the name suggests, a dream home is a home you have always dreamt of and wanted to buy. It is usually large and extravagant and has all the amenities you have ever desired. A dream home is a one-time purchase as people have saved up for it all their life.

It has everything one wants from their home –

• A big kitchen 
• Airy and spacious rooms
• A sizeable backyard 

Most dream homes are expensive. This is why you should check Loan Against Property interest rates while planning to buy a dream home, as they are high in most cases. There are different cases when you can go for a dream home. Some of these cases include:

• When you are sure about the home and your decision to live there permanently
• When you have a stable and secure career
• You have sufficient resources, and you are financially stable 
• When considering having children or starting a family

Only in the above circumstances invest in a dream home. It’ll be a more comfortable and financially wise decision.

So What Should You Opt For?

Getting a starter home is a better decision as it gives you an idea of the real estate space and will keep your aspirations high. This way, you can go for your dream house later, but you will have a stable backup option for you and your family. 

Here are some reasons a starter home is a better option:

• You feel stable and satisfied with how things are with a starter home, as you will have a home and the opportunity to grow financially faster.
• It’s a wise investment that can give you good returns in the short and long run
• You become an owner of a real estate property that can fetch you a higher value later
• When taking out a House Loan, you may be eligible for tax benefits (deductions) under several income tax acts that apply to the repayment of principal and interest.
• You can take advantage of the PMAY program’s perks, which include a House Loan subsidy of up to Rs. 2.5 Lakhs

Since starter homes are less expensive, many people find it easy to come up with the money for a down payment, and because the loan amount is smaller, it can be repaid quickly and easily.

Conclusion

Buying a home is a major decision. While planning to take a Home Loan, use a Home Loan calculator to calculate all the related costs and the repayment amount. Also, you must manage your finances well if you plan to buy a home, regardless of size and type.