Different Homes For Different Stages of Life.

The Apartment

Let's face it, most of us have been there. That first tiny apartment you share with your college roommates. The one-bedroom you're "settling" for because it's all you can afford and is close to the subway line that takes you to work.

The dealbreaker: You can't imagine living in that tiny space with someone else for the next 30 years.

Just as you're getting your footing in this world—getting enough money together to treat yourself and maybe even a significant other; buying that first piece of furniture that's not from Ikea; learning how to cook more than ramen noodles and spaghetti sauce—real estate developers come along and snatch up all those starter homes and build a new development of townhouses and condos.

Starter homes shrink while many young people's debt to income ratio rises. Housing costs when you're just starting out in the world can be rough. And so, instead of buying a house, many people in college or young professionals stick themselves in tiny apartments.

Apartments are great when you're younger and are still very mobile in your career and geographically. There is enough space for you to live while making it easy to clean. It's not a forever home, but when you're saving up to enter the housing market properly, it's a rite of passage.

Given the state of the economy and the real estate market though, many young adults forego house hunting to live in their parental home if its in a convenient location. Between homeowners insurance, principal and interest payments, and closing fees, it is more common for people to stay at their parents' homes to save enough for a larger down payment down the road.

The Starter home

What do we mean by starter home?

A "starter" home is a house or apartment that a young family can afford while they save to purchase a larger, more expensive home. Though it's a step above an apartment, a starter home is not a forever home as the name implies.

While an exciting part of someone's life, this is the kind of home that does not require a large mortgage payment.

Home prices for starter homes can vary massively depending on the career prospects of the homeowners. For some, what is a starter home is actually the best that they will be able to afford.

There is a reason why real estate agents tend to ask about not only what you look for when you want to buy a house now but also in the future. With changes in the economy and interest rates, the home buying process can end up being more affordable in the future depending on the moves that the homeowners make.

People in their late twenties or early thirties, who are thinking about having children will often use starter homes to get more privacy and get a step higher on the property ladder.

The main difference between starter homes and apartments are the size.

With starter homes, there is more bedroom area usually with a master bedroom having its own bathroom. Starter homes most often have garages too unless they are in an urban setting where parking on the street is allowed.

What is a new house now can be sold after the mortgage is paid in order to move into a bigger home.

The Family Home

Many buyers eventually move on to a family home, one where a growing family has enough space to spread out.

When it comes to the family home, the ideal location and how much house you're getting for your monthly mortgage payment becomes significantly more important. Though people move with their children every day if they continue in their home search and find a better deal somewhere else, home buyers in the market for a family home want to invest in what will be the house their children will grow up in.

The requirements from mortgage lenders, the amount of down payment, and mortgage rates all take on a whole new dimension.

This time your real estate agent will go over the mortgage basics one more time and find out a purchase price that suits your goals. After all, a family home can look different from person to person and so does the home's purchase price.

The drain the family home tends to place on someone's bank account is due to its proximity to education, middle and high school, typically, and the demand driving real estate prices up.

The most popular type of property for a growing family is a single-family home, with no shared walls with neighbours and usually a yard. These features obviously affect the monthly payment amount but for people in the stage of their life where their lifestyle considerations shifted towards the needs of their children, they won't think about what a mortgage lender demands.

This is also the point where many will start talking about this potential piece of real estate as their dream home. For that home, ownership becomes something more permanent. Many buyers will look for reasonable monthly mortgage payments while also refinancing if there are significant changes in the interest rate.

Most conventional loans place a lot of stress on the family. Between insurance premiums and other fees associated with a mortgage broker, many homeowners look to refinance their mortgage to get new loans that have a more reasonable interest rate.

The Vacation Home

This section is not about vacation rentals, but rather we're looking at people lucky enough to afford a second or even third home.

At this point in someone's life, whether or not they have a family, if they are able to afford a vacation home then their debt to income ratio needs to be very low.

In that scenario, there is little to no stress associated with proving bank statements, or with dealing with closing costs.

A vacation home is a luxury, one that very few can afford. With the credit crisis of 2008 and now the pandemic, many people let go of extraneous real estate.

Of course, on the other hand, if the lending services provided a generous deal and all of the mortgage payments are paid then the vacation home becomes an extra source of income.

People can either hold onto it if they like it enough or sell it to shore up their bank account.

The Investment Property

If you have the cards and play them right, you can eventually get into the real estate market not as a homeowner but as someone investing in pieces of real estate.

After all, everyone needs somewhere to live. Now that the tables have turned and you're looking at home prices in terms of how much you're set to receive then working closely with a real estate agent to find the best buyers can help you climb even faster up the property ladder.

The Real Estate Market is Complicated

Life, also, is complicated and through hardships or strokes of luck you may find yourself moving from house to house depending on your changing circumstances.

At different points in life, and in your finances, you may pay more attention to what whether or not a house has a homeowners association, a finished basement, or even if it is close enough to the subway.

Whether you're thinking of children or wondering what you'll do with the empty rooms once they leave for college, there is space for you to find the perfect place to live.

If you conquer the intricacies of your homeowners' insurance, the interest rate, and stay on the house hunt then there is a good chance that you can get out of your starter home or the family home you settled for and move into your forever home, your dream home. Keep in touch with your real estate agent, they can keep an eye on the housing market for you and contact you when the perfect place goes on sale.

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