Many or all of the products here are from our partners. We may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
If you're a first-time buyer looking for a home, you have choices. You could buy a larger property or opt for a starter home instead. Here, we'll discuss the pros and cons of a starter home and help you decide if that's the right choice for you.
A starter home is generally defined as a smaller property that a buyer only intends to live in for a few years. There's no set number of bedrooms or square footage. A starter home might have one bedroom, or it might have two or three. It might be 800 square feet or 1,500. But generally, you'll know you're buying a starter house when you can picture yourself outgrowing it in time.
Starter homes also tend to be less updated than forever homes, though this isn't always the case -- you may find a starter home with plenty of upgrades.
A starter home is generally smaller than a forever home. As such, it's a good choice for a first-time home buyer. A starter home makes for a smoother transition into homeownership. If you're not used to making a mortgage payment, covering property taxes, or maintaining a property, then you may be better off with a smaller home rather than a larger home.
There are benefits to buying starter homes you should know about:
On the other hand, buying a starter homes has its disadvantages:
Meanwhile, here are some tips for finding a starter home:
Buying a starter home may seem like a compromise, and to a large degree, it is. But remember, while you may not want to stay in your starter home forever, it could be a smart investment. If that home gains value between when you buy it and sell it, you could end up with a nice profit, and that's money you can use for a down payment toward a larger home.
Also, while some people do end up living in a starter home for just a few years, other buyers wind up staying for decades. You might think you'll outgrow your starter home, but you never know when that home might end up suiting your needs for many years.
If you're going to buy a starter home, be sure to shop around with different mortgage lenders for a great deal on a home loan for that property. Each lender sets its own interest rate and closing costs, so gather offers so you can compare your choices.
You'll also want to make sure you're a strong mortgage candidate. This generally means having a good credit score (620 is the minimum for a conventional loan), a low level of existing debt, and a steady job. You can consult this beginner's guide to home loans to learn more about what it takes to qualify for a mortgage and how to find a great deal on one.
If you're a first-time home buyer, our experts have combed through the top lenders to find the ones that work best for those who are buying their first home. Some of these lenders we've even used ourselves!
We've compiled a first-time home buying guides to help you confidently take the next step to land your best mortgage deal. Check out The Ascent's first-time home buyers guide for essential education.
A starter home is a smaller, less expensive home that you don't intend to live in for more than a few years. Starter homes tend to be less updated than forever homes, though this isn't always the case. Many buyers purchase a condo or townhouse as a starter home, though a smaller standalone house can serve as a starter home as well.
Starter homes are generally cheaper than forever homes. And due to their size, they're easier and less expensive to maintain. As such, they're a good choice for new buyers who have never owned property before. They also tend to be fairly easy to sell, since there's generally strong demand for starter homes.
If you have a limited home-buying budget and aren't sure how much upkeep you can manage, then a starter home could be a better choice than a forever home, which will generally be a much larger home. On the other hand, if you buy a starter home, there's a good chance you'll end up moving within a few years, so you'll need to make sure you're prepared for that potential hassle. It could end up making more sense for you to wait a few years, save more money, and buy a home you know will suit you for decades.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned.