Starter Home or Forever Home: How Suffern, NY Homebuyers Can Decide What’s Best

By Tina Martin

Many first-time homebuyers in Suffern, NY struggle with the same question: Should you buy a starter house or your forever home? With the median home price in Suffern coming in above $400,000, it’s a tricky question to answer. A house is a large investment, so you want to get it right.

Luckily, you can figure out which approach is best for you by reviewing the situation appropriately. Experienced Realtor Danielle Russodivito of Prime Homes Property Group walks you through the process.

The Costs of Homeownership

First, it’s essential to understand the cost of homeownership. Many first-time buyers focus solely on the debt associated with the home purchase. However, you may have far more wrapped up in your mortgage payment than that.

For example, if you don’t put at least 20 percent down, you may have PMI. Typically, PMI costs between 0.5 and 1 percent of the loan amount annually. That means, for a $400,000 home, you’d owe between $2,000 and $4,000 per year, or $167 and $333 per month on top of your principal and interest payment.

Insuring your home also gets wrapped up in many mortgage payments, adding to the cost. Generally, the price of homeowner’s insurance is based on the value of the contents inside and how much it may cost to repair structural damage or rebuild the house. There is also coverage for injuries that occur on the property, and that cost is typically based on local norms.

However, homeowner’s insurance does cover home system or appliance breakdowns. With those, you’d need a separate home warranty coverage. This annually renewable contract provides coverage for appliance and critical system repairs, including heating, cooling, electrical, and plumbing system breakdowns.

Finally, there are property taxes. In Rockland County, the effective tax rate is near 2.3 percent. If you have a $400,000 home, you’d owe around $9,200 per year, which is about $767 per month.

Understanding the cost of homeownership makes it easy to see what your budget will withstand. In some cases, that alone may determine if you go after a starter or a forever home. If it doesn’t, keep reading to see how you can decide.

Start vs. Forever Home

Pros and Cons of Starter Houses

Starter homes offer some clear advantages. First, they usually cost less overall. They typically have smaller insurance and property tax bills along with lower sale prices. Since the price is lower, it may be easier to get a 20 percent down payment pulled together to avoid PMI. Plus, maintenance and upkeep are typically cheaper and easier to manage with smaller properties.

There’s also long-term potential with a starter home. You can leverage its value to make your dream home more affordable later or turn it into a rental for ongoing income. If you like the area, the lower price could make updates more affordable later, allowing you to turn the house into your dream home.

As for drawbacks, selling a starter house is potentially more difficult since they’re smaller and don’t have the nicest features, making leveraging it harder. Additionally, you may need to fix the place up before moving in, as some starter houses aren’t well maintained.

The smaller size of a starter home is also a negative. If you plan on expanding your family, the house may begin to feel cramped far faster than you’d expect.

Pros and Cons of Forever Homes

With forever homes, the main benefit is it’s a one-and-done option for homebuying. You’ll be putting down roots instead of planning to leave later.

Forever homes are also typically bigger and may have nicer features, making them more comfortable. It may also come with a better school district or neighborhood and have lower crime rates.

On the downside, forever homes are more expensive to purchase and maintain. Plus, your insurance rate and property taxes may climb significantly over time if home values appreciate, potentially faster than you can shoulder.

Choosing the Best Approach for You

In the end, which approach is best for you is a personal choice. Consider what you can genuinely afford and the pros and cons above. That way, you can look at the situation holistically, making it easier to decide.

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