Often times we are not able to have everything we wish for in a home due to a higher cost than anticipated or any unforeseen changes in financial circumstances.
However to make owning a home a reality, consider your first purchase by going with a starter home. It will come with fewer rooms, and may have less leisure space. At the end, it will ultimately be your home where you can build equity towards a bigger home purchase.
A one bedroom apartment in the city could be a starter home until you start a family then upgrade to a 2-3 bedroom in the future. A smaller single family home with 1-2 bedrooms could be a starter home until you can upgrade to a larger 3-5 bedrooms single family home once your family gets bigger with kids.
Starting small does comes with additional cost than if you were starting with a bigger purchase. You will likely grow out of the smaller purchase. Once you own the smaller home, and move from it, you will have to pay the transaction fees again that can go as high as 7% when selling a home. These transactions can add up significantly depending on the number of times you buy and sell.
Try not to rely on buying points on a mortgage if your plan is to move within a few short years because it generally takes a longer time to recoup the purchase cost of the points, and you may end up not saving anything with points.
It is important to weigh all the pros and cons of buying a starter home because home ownership of a starter home may cost you more in the long run than anticipating the need for a bigger home in the future.
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