Ideally, you should stay in a home for at least three to five years to break even on your mortgage. Your mortgage payment should be 25% or less of your pre-tax income.

Buyers should consider walking away from a deal if document preparation for closing highlights potential problems. Some deal breakers include title issues that put into question the true owner of the property. Or outstanding liens, or money the seller still owes on the property.

4 Signs That It’s a Good Time to Sell Your Home

• You Don’t Need Any Big Repairs or Remodeling. Sure, upgrading a bathroom sink might make you feel better about what potential buyers see when touring your home.
• You Have Positive Equity to Avoid Out-of-Pocket Costs.
• You Know You’re in a Strong Market.
• You Can Comfortably Transition to a New Home.

You can sell your house immediately after you buy it—but that freedom comes at a cost. For example, there are closing costs —loan origination and appraisal fees, insurance payments, escrow funds, taxes—of 3% to 5% of your purchase price which you won’t recoup in a few months between buying and selling.

four to five years

True, refinancing allows you shorten the lifetime of your loan and negotiate a lower interest rate—which can in turn reduce your monthly mortgage payment. But selling could make more sense financially, if your home’s gone up in value since you bought it.

How to build equity in your home

1. Make a big down payment. Your down payment kick-starts the equity you build over time.
2. Increase the property value.
3. Pay more on your mortgage.
4. Refinance to a shorter loan term.
5. Wait for your home value to rise.
6. Learn more:

You can figure out how much equity you have in your home by subtracting the amount you owe on all loans secured by your house from its appraised value.

Refinance Percentage If your lender will loan up to 80 percent of the home’s value, the most cash you could access would be $40,000 — that is, 80 percent of the home’s value, $240,000, minus the $200,000 you still owe on the loan.

How long do you have to wait to refinance? You have to wait 6 months since your most recent closing (usually 180 days) to refinance if you’re taking cash-out or using a streamline refinance program. Otherwise, there’s no waiting period to refinance.

Paying cash for a home eliminates the need to pay interest on the loan and any closing costs. A cash home purchase also has the flexibility of closing faster (if desired) than one involving loans, which could be attractive to a seller. These benefits to the seller shouldn’t come without a price.

Buying a house “with cash” can benefit both the buyer and the seller with a faster closing process than with a mortgage loan. Paying in cash also forgoes interest and can mean lower closing costs.

Here are some ways through which you can do so:

1. Pay Your Cash Down Amount with an Unsecured Loan. If possible, make sure you get a pre-sanctioned or pre-approved Home Loan before finalizing the property you want to purchase.
2. Use Home Loan for Furnitures & Fixtures. Let’s understand this better with an example:

Another way to get a mortgage on a house you already own is by taking out a reverse mortgage. Only people 62 years old and older can take out this loan. Essentially, it’s a program that allows the homeowner to make money on the equity of their home and is only used in when really needed.

Can I remortgage if I own my house outright? People who have no mortgage on their home, (known as an unencumbered property) are in a strong position to remortgage. With no outstanding mortgage, you own 100% of the equity in your house. You will need to meet the criteria for the new mortgage.

Having a line of credit in hand gives you easy access to cash when needed. This is money that can be used for a variety of purposes: Financing part or all of a “big ticket” purchase, such as a home, vehicle, boat or home improvement. Paying a tax bill that is coming due.

Interest on a HELOC or a home equity loan is deductible if you use the funds for renovations to your home—the phrase is “buy, build, or substantially improve.” To be deductible, the money must be spent on the property whose equity is the source of the loan.

Is an appraisal required with a HELOC? In general, a new appraisal will be required to qualify for a home equity line of credit. However the lender determines a current home value, it’s needed to calculate the amount of credit you’ll be eligible to borrow.