When you consider your home purchase, there is an unspoken rule that plants a seed that you should stay in your new home for at least five years.  Otherwise, you’re probably going to take a hit financially, but like many things in life; the Five Year Rule is not a hard and fast one.

It may not be readily apparent to you, but there are two major financial factors that can have an effect on your bottom line.

Suggested Reading: The Arizona Home Plus Program

1. Closing Costs

The first hit is your closing costs.  Every time you sell and you buy there are closing costs involved that are come out of your pocket. Depending on what you agree upon with the seller or the buyer, you will have to pay some or all of the closing costs involved in the transaction. This can amount to thousands of dollars in expenses that will add up over time.

2. Interest

You take a second financial hit when you look at where your monthly mortgage payments are going.  The structure of mortgages has you pay much more interest in the first few years and then you usually start to pay down enough principle after the five-year mark.

Making Additional Payments

There are several ways that you can pay off your mortgage more quickly. If you apply some creative accounting by paying bi-weekly instead of monthly, make additional payments, or pay more than what is due toward your principle each month.

When you start shopping for your home, think about where you expect to be in five years and make your buying decision based on that. Planning on adding to your family? Planning to make a career move? Take these potential life events into account to ensure you’re purchasing a home that will suit your needs for years to come.

Whatever your mortgage needs, our experienced mortgage professionals would love to sit down and discuss your needs. We look forward to hearing from you!

The Certo Team
55 N. Arizona Place Suite #103
Chandler, AZ 85225
602-429-6789