Generally, it is not worth buying a house for only two years. However, this is a difficult question to answer because it is determined by your financial situation and loan terms. For example, if you are only planning on living in a house for two years before you start the buying process, you might be better off continuing to rent. This is especially true if you recently became financially independent and have just started working or haven’t planned for your future. On the other hand, if you aren’t secure in your profession and don’t know where you’re going to end up for work, renting is a better option.
What do the experts say?
Experts recommend you should wait to sell your property until you’ve broken even on your mortgage. Usually, it takes at least three years for this to occur. You want your property value to have appreciated enough to cover the outstanding amount on your home loan, settlement fees, taxes and other costs.
What should you consider?
In addition to your property value, you also want to consider your mortgage itself. Some lenders charge exit fees for selling your house before the loan term is up. Add this onto fees they charge for paying your loan off early, and even if your property value increased enough to pay off the loan amount, you may end up losing money.
Another option to consider if you have to relocate for a job or other reason is renting out your home and treating it as an investment property. Not only can you use the rental income to pay off your mortgage, but you may be able to refinance your mortgage into an investment loan or use your property as security on a second home loan.
The last thing you should consider is if it was your first home. If so, you may have been eligible for a first-time homeowners grant that could reduce the cost of your home or cover its fees.
It may not be worth buying a home if you will only live in it for two years. If this is the case, you should consult with an experienced mortgage broker. Mortgage House and our team of brokers understand the process of buying a home, and we also understand how to get the most for your money.
