When shopping around for a house, many first-time home buyers get stuck in a dilemma – should they buy a starter home or go for their dream property?
This is a tricky question, and it can be challenging to come to a solution. Because on the one hand, a starter home is more affordable for a beginner. On the other, it does not have all the amenities and luxuries you envisage for your dream home.
So, what’s the solution? Well, there is no one-size-fits-all approach, as every individual comes from a different financial background. However, the following points can help you choose between a starter vs dream home.
Starter home – pros and cons
As the name suggests, a starter home is made for starters. It is a home with all the necessities and is priced in a range affordable to first-time buyers. There is a range of affordable housing options and home loans under the PMAY scheme Indian citizens can benefit from. The starter home pros include:
- Starter homes are affordable
- They have relaxed home loan eligibility criteria
- It is a good investment
However, starter homes are not meant for accommodating big families, and owners outgrow them after some time. They may want to move into a bigger house with more facilities and space, a greater number of rooms, etc. In such a case, you can sell the starter home and use it to cover some of the costs of buying a new house. You can also use an EMI calculator to see how this would reduce your EMI burden and benefit you.
Dream home – pros and cons
A dream home (also known as a forever home) is the one you have always imagined yourself living in. It has all the facilities and luxuries you want in life, and you can live in it for an extended period. However, this can require you to take on a hefty loan amount. Nonetheless, there are various benefits of buying a forever home.
Once you have purchased your dream home, you can settle down and don’t have to worry about searching for different options and moving around. Moreover, you can refurbish the house as per your style and preferences.
But make sure you have a steady income or a savings corpus to back the new additions to your home. A dream home will likely cost you more than a starter home, so make sure to keep a tab on the current home loan interest rates and plan your finances accordingly.
Over to you
Purchasing a home requires a lot of financial planning and commitment. To make this journey easier, Tata Capital offers attractive interest rates and loan options. Enjoy a comfortable loan tenure of up to 30 years without any hidden charges or additional costs. What’s more, we only require minimal documentation and disburse the loan amount within hours, if not days. So, why wait? Contact us today to know more!