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Author: sykesix Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 126960  
Subject: Re: When can I qualify for a loan? Date: 4/27/2013 2:28 PM
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First off is the idea that a 4 year holding period is long enough. It isn't.

Even if I believed you, and I'm still not sure that I do, this still falls under the last statement above. If it wound up that I'm, say, 10% of the house cost in the hole after those four years relative to rental costs, it'll still have been worth it to me on balance.

Think about it for a minute and you'll be a come a believer. First, I agree with your general sentiment that buying a house is a lifestyle choice. If you want to pay extra for a certain lifestyle, that's your business and nobody else's. And I happen to really like owning a home, so I understand your motivation.

But in the first post in this thread you asked about affordability, so let's do the thought experiment of what your holding period might need to be to cover your costs. In addition to the commissions, in the round trip of buying and selling a house, you have to pay title insurance, get an inspection, an appraisal, recording fees, blah, blah, blah. It all translates to a big stack of money. IIRC, the average transaction cost of buying and selling a home are something 7%. You can see quite realistically four years might not be enough to recapture the costs through appreciation.

As I said above, buying a home is a lifestyle choice, so if that's your choice, great. But count the costs before jumping in because it might be harder to get out than you think.
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