海角大神

If you鈥檙e thinking about buying a home, one of the first things you should consider is how long you鈥檙e going to stay in the area. If you鈥檙e pretty sure that you鈥檙e going to be moving elsewhere within five years, you鈥檙e better off renting.

Why is that? There are several reasons.

贵颈谤蝉迟,听the first five years of the mortgage are the worst years for building equity.聽The vast majority of each of your payments during the early years of your mortgage is going to go straight towards interest. On a thirty year mortgage, you build approximately 5% of your home鈥檚 value in equity during the first five years of the mortgage.

厂别肠辞苍诲,听much of that small amount that you do build in equity will be eaten by realtors when you sell.You can try the 鈥渇or sale by owner鈥� route to try to recoup some of that value, but there are challenges and expenses involved with going that route as well.

罢丑颈谤诲,听what equity isn鈥檛 devoured by the realtors will be devoured by the bank.聽Closing costs are not your friend. They can add up to a noteworthy portion of your mortgage, particularly when you鈥檙e really only concerned about the small amount of equity you鈥檇 build during that time.

贵颈苍补濒濒测,听the housing market isn鈥檛 the giant money rocket that it was seven or eight years ago.聽At best, home prices are stable. In many areas, they鈥檙e still drifting downward. You鈥檙e not going to make a mint by buying a house, waiting a year, and then flipping it. If you鈥檙e reading any personal finance advice that suggests doing so, check when that advice was written. I鈥檓 willing to bet it was in 2008 or before.

If you鈥檙e thinking about buying a home, one of the first things you should consider is how long you鈥檙e going to stay in the area. If you鈥檙e pretty sure that you鈥檙e going to be moving elsewhere within five years, you鈥檙e better off renting.