Starter Home to Dream Home Transition

You’ve always had a blueprint of it laid out in your mind — your dream home. And for as long as you can remember, you’ve dreamt about that beautiful kitchen with the granite counter tops, the spa-like bathroom, the spacious backyard complete with a patio and tree house for your kids or grand kids. But you know that a home like that comes with a hefty price-tag — that you may not have been ready for until now. So it's time to start saving!

Whether you’re building your dream home, or thinking about moving into a better home that you can still afford, you’ll have a lot on your hands in the coming days. So, if you’re ready to buy a house and start the transition of moving up from your starter home, here are a few tips you should keep in mind.

How Can You Afford Your Dream Home?

If you’re realistic about your finances, setting the goal of landing your dream home is possible. The task of how to afford your dream home can be synthesized down to one simple word: savings. With careful planning and commitment to putting cash away every month, you might just find your dream home coming to life sooner than you think.

Deal with your starter home

Getting out of your starter home can be a challenge. You’ll likely have to make repairs before it’s ready for the real estate market. But even selling your starter home doesn’t have to be painful. Pace yourself, make to-do lists and stick to a thrifty budget.

Get your home on the market as soon as it’s ready, and be sure to keep an eye on the market in your area to get an idea of what your home will list for.

Get consistent with your savings

As a homeowner, you know that buying, owning and maintaining a home is expensive. And the bigger your home dreams, the more you’ll have to spend. In most cases, more square feet translates into a higher monthly mortgage payment.

So, kickstart your plans to move up in the world by creating an aggressive savings strategy. It’s a good idea to begin this by cutting out little luxuries and pouring that money into your savings account instead. With a focus on paying down the monthly payments on your credit cards and student loans, your debt-to-income ratio will improve — and that can land you a better FICO score.

A good credit rating can help you land a lower interest rate when buying a home. And there are other benefits with a strong credit score. You may qualify for financing incentives from your mortgage broker, like the waiving of fees that can help you move into a home you can afford. And a high credit rating may help to increase the price range of your dream house when shopping.

Take a look at the extra cash you’ve got in your checking account every month and do what you can to move a large percentage of that into savings. You may have to make a few sacrifices to get there, but with home prices on the rise, you’re going to need cut some corners and dive deep into saving up.

Define your wants and needs

What’s most important to you in your next home? What’s your ideal location? How many rooms do you want? Are there any features you just can’t live without?

Before you go on your search, make a list of exactly what you’re looking for and what you just won’t compromise on. That way, you know you’ll be making the right choice when it comes time to buy your dream home.

Decide whether to buy or to build

If you’ve got a very specific vision in mind for your dream home, building could be the better option. But, if your ideal home is an old Victorian or something more modest in an already established area, your best bet could be to buy.

Not sure which’ll be right for you? We’ve got some advice on buying a home that can help.

Don’t rush it

Nothing worth achieving ever comes quickly. The same goes for home ownership! There’s no shame in taking time to save up and really decide what you want in your next home.

In fact, why wouldn’t you? Go into your next home buying experience prepared, informed and confident that you’re moving on up to your dream home and not just settling for the next best thing.

Learn How to Protect Your Dream Home

When you’re finally ready to get building or put in an offer on your dream home, check out our homeowners coverages and connect with your American Family Insurance agent (Opens in a new tab) to learn about all the ways we can protect your hard-earned dreams — because we know a home is more than just a roof over your head.