STREET DOGS
Alternate advice for first-time home buyers.
Ben Carlson suggests waiting until you’re ready for a more high-quality home
Thinking of getting onto that first rung of the property market, as soon as you possibly can? That might not be such a great idea. "I think the idea of buying a starter home is one of the worst moves you can make financially as a younger person," says Ben Carlson at a Wealth of Common Sense. "Buying a starter home will likely cost you way more money in the end as opposed to waiting until you’re ready for a more high-quality home. "Around 70% of your mortgage payments in the first five years will go towards interest costs on your loan, so you build up very little equity in a starter home by the time you’re ready to move. Then you end up spending a ton of money trying to fix the place up. "And when you do decide to trade-up to a nicer place you end up paying closing costs and realtor fees. "In the majority of cases it will prove to be a far better move to rent for a few more years and save enough money until you can afford a nicer house. At that point the pros far outweigh the cons be...
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