Housing question

[snoopdoug1]

Is there a good rule of thumb to the number of years you need to stay in a house to make it worthwhile? Right now I'm living in an apt and am considering moving to a townhouse.

Thanks 🙂

EDIT: Just to add some more info. Rent is ~600, townhouse would be ~140k and have about double the space.

 

[FoBoT]

it depends on if you are riding the bubble up, or down

me personally, i would not buy a house if my plan was not to live in it 5+ years

 

[Whoozyerdaddy]

Depends on how fast your housing market is rising. (Or falling)

There's no real answer to your question with the information you've provided. Best advice is: Don't buy a house for a short term investment. Buy the house to live in. (Buy and hold... sound familliar?)

 

[Homerboy]

rather put your money into equity and tx deductable mortgage interest or just pay your landlord?

 

[Jzero]

Financially it depends on the market trends, really.

But personally, moving is such a big fat pain in the ass that I would want to stay 5+ years, too.

 

[snoopdoug1]

Yeah, I'm assuming the bubble is going down right now, right? House prices are decreasing as the interest rate goes up.

I've got plenty of $$ for a downpayment, so that's a non-issue. I'm just trying to figure out if it's worth it right now. Is there a so called "bubble"? What I don't want to happen is buy a place, and have it drastically go down in price 🙂

Edit: Thanks for the responses 🙂

 

[xanis]

i would say 4 or more

 

[puffff]

long enough for the sum of your principal portions of your payments to equal closing costs, lawyer fees, etc.

 

[snoopdoug1]

Originally posted by: puffff
long enough for the sum of your principal portions of your payments to equal closing costs, lawyer fees, etc.

wanna explain "sum of your principal portions" ? Financial noob here.

 

[AmpedSilence]

look on your amortization schedule. sum up the principle portion of the payment. and when that equals the closing costs and other fees; then its worth it.

 

[snoopdoug1]

interesting... don't think that would take very long...

 

[puffff]

Originally posted by: snoopdoug1

Originally posted by: puffff
long enough for the sum of your principal portions of your payments to equal closing costs, lawyer fees, etc.

wanna explain "sum of your principal portions" ? Financial noob here.

on a typical 30yr fixed loan, during the first few years, only a portion of your payment goes towards actually paying off your house. the rest goes towards interest.
for example, an $1800 payment, the first few months, only maybe $200-300 is considered principal. (this ratio changes each month, you pay more principal per month the longer you are into the mortgage) the rest is interest, basically, money that goes to the lender for loaning you in the first place.

to make it a simple case, suppose your closing costs, lawyer fees add up to $5k. each month, out of your payments, only $200 goes to the value of your house. then you'll need 25 months to break even.

keep in mind this is a very simple example that doesnt take into consideration a ton of other factors. (edit: such as property taxes, costs of selling your home)