When considering whether you should purchase a new Santa Cruz home, you want to take into consideration the five-year rule. That’s the minimum number of years many experts believe you need to own a home in order to break even on it when you sell it. Some experts are now suggesting seven years, but in this article I’ll be talking about the five-year rule.
What happens if you own your Santa Cruz home for less than five years? Often, you’ll lose money because:
1. You pay thousands of dollars in closing costs each time you buy property. That money does not build equity or increase the value of your home in any way.
2. In the first five years of your home loan, a much higher percentage of your monthly mortgage payment goes toward interest than toward…