Buying our "FIRST" home....do people expect a "Second?" Budget!?

Question

I have the ideal dream house in mind...like-new....2.5 bathrooms and plenty of room for guests and a big family. But right now its just me and my boyfriend (soon-to-be fiance within the next couple of years) trying to save for a house. Our savings are slim, and I forsee more of a 1 bath, 3 bedroom, single family ranch style home.

I always hear people saying "Its their FIRST home..."..."First time home buying"....etc.

So how does that work? We settle on the first home, save money, sell the house and then pay even more money for a nicer house in the future? How is that possible? Help please I need someone with more knowledge on homebuying.

Answer 1

if u put 10% down on a 250,000 house you have 25,000 invested.

If the value of the house goes up 10% in the  time  that you own it it would be worth 275,000. So if you sell at 275,000 you would have 50,000 in hand to use as a down payment on a second house.

50,000 would be 10% of 500,000 so you get a bigger house and have more to put down.

the initial downpayment doubled in the time you owned the house because you leveraged your money.

this is a simple example and your numbers will be different.

It's always best to buy when it makes economic sense for you. I tried to save extra money once and the price of the house you want can go up faster than you can save or interest rates can go up and make the same house more expensive to afford.

Answer 2

Our first home was a small two family.  We lived frugally and saved the tenants rent  and did plenty of upgrades by ourselves.  Sold 7 years later for a profit that was triple what we paid.

Answer 3

What is it you want out of the home.  Many people do get starter homes, get better jobs, and move into better places when they gain equity in the home via paying off the mortgage and increases in value.  What many people miss these days is using a home as a retirement instrument.  If you want a home now, you may have to settle, but don't despair, be smart about it.  Be frugal, don't get a cookie cutter 30 year mortgage that doesn't keep the dream home dream alive.  Pay that off in 15 or 20 years.  hopefully your only 35-40 years old and the home has gained 15-20% value, you have better jobs and you can put down half for your dream home and pay that off in 15-20 years, now your 60 maybe entering retirement, or maybe you put it off and work for 5 years to just sock money away for retirement.  Now that second home has hopefully gained 15-20% in value, you can downsize now since you don't need such a large home, pay for it in cash with plenty to spare and competely enjoy retirement to it's fullest, feel free to ask questions, keep your dream alive!  Good luck