Thursday, August 04, 2011

My advice to you...

Do not buy a house. Do not buy a house, or other permanent living space, unless you can pay 50-100% of the cost and can finance, if necessary, the rest at a loan for not more than 5 years.

In other words, if you have a ton of cash available because you've been making good financial decisions like staying out of debt and saving a big portion of what you earn and/or living a greatly scaled down lifestyle and you want to do something with the cash and you don't mind the risk of being tied down to one location for a while, then go ahead and buy a domicile.

Otherwise, seriously consider renting something sensible in the general area you want to live in. It doesn't have to be the perfect home; you are only renting and can move on to a better place pretty much any time you want. And forget about equity, which is a fool's dream anyway as many of us have learned over the past 20 years. Since your place is a reasonable size and the infrastructure is someone else's problem to maintain, you can be saving and/or investing (also a bad idea, but a lecture for another time) and keep your funds available and hopefully intact through lucre and not property.

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