Some people crave new surroundings and love to move into a new house every few years.
For others, the process involved with selling one home and buying another is an experience they could live without. They do everything in their power not to move.
No matter what end of the scale you tend toward, you’ve probably wondered how long you should stay in your house. So, what makes the most financial sense?
The five-year rule
The long-standing rule of thumb is that if you buy a house, you should plan on staying there for at least five years.
This is because moving costs money. Closing costs alone will typically run between two and five percent of your home’s value. Add to this moving expenses and the time you need to take off from work to do the necessary paperwork and physically move, and you’re probably looking at several thousands of dollars.
The other factor to consider is that it takes about five years of paying down the mortgage and chipping away at the principal to get to the point where owning a house is cheaper than renting.
Now, if you buy at the lower end of your price range and can make additional mortgage payments on your home, then you can very well afford to move out in fewer than five years.
When it’s all said and done, however, if you buy a home that’s pushing up against the limit of your budget, make sure to stay there for a while. Take time to pay down that mortgage for a while so you’ll have the financial flexibility to move when you’re ready.
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