Do you love your house but hate paying your sky-high mortgage? Are you up to your ears in credit card debt? Both of these non-ideal (and frankly, scary) scenarios can lead you to asking the question – “should I sell my house to pay off debt?”
This is a common solution that many homeowners turn to every month as a means of paying off debt. But before you go off following this trend, there are a few things you need to consider including just how much you realistically stand to make by selling your home, what are the rent and mortgage rates looking like where you want to live, and are you prepared to move out of your home.
Let’s look at some of these factors in a little more detail.
Realistic Home Sale Price
If you sell your house to pay off debt, sell it for close to what you owe on the mortgage. If your market value is much lower than what you owe, don’t sell just yet. You’ll sell your house much higher if you sell it for market value, but selling it on the market can take a while and if you’re really in bind, awhile can seem like forever.
If you sell your house for less than what you owe, then you’ll get hit with a deficiency which means the balance of what you sell it for is less than the original mortgage amount. So you should only sell your house to pay off debt if you have the equity to make up for the hit you might take on your sale price.
What Are the Rental and Mortgage Rates Like Where You Want to Live?
If you sell your house, will you have enough money to cover the moving costs and also be able to pay for rent in another home? Rent can be upwards of $2,000 per month depending on where you want to live, and it can be even higher if you need a place for your whole family.
If you want to buy another home rather than rent one, you’ll also need to take mortgage rates into consideration, and you need to be honest with yourself about whether or not you can get a mortgage.
Selling your house to pay off your debt really only makes sense if you can afford to live somewhere else. Scrambling to sell your home will only make you more stressed out rather than giving you the peace of mind that you’re looking for.
Are You Prepared to Move Right Now?
If you sell your house to pay off debt, will you be able to move out on such short notice? There’s a lot of work that goes into selling a home including repairs, packing, and renting a moving truck. You’ll also want to find the right person to sell your house for you – someone who can sell it fast either on the real estate market like a real estate agent or a cash buying real estate investor like Quick Fix Real Estate. A real estate agent can likely get a higher price than a cash offer but they also take a cut of your sale price in the form of a commission. The average real estate agent commission is 6% which can equate to tens of thousands of dollars.
The Bottom Line on Selling Your House to Pay Off Debt
Selling your home is a big decision but it can be a beneficial and viable solution if you are buried in debt. If you decide to go this route, make sure you have enough equity to justify the sale, sell it fast, and make sure to explore all selling options including on the market and for cash.
Sell Your House for Cash Today to Pay Off Debt
Is it possible to sell your house for cash? The answer is yes, and it’s much faster than any other home selling method. Quick Fix Real Estate is ready to make you a guaranteed cash offer for your home and we can have funds in your hands as soon as today. Our process starts with a free, no-obligation home assessment and ends with a check in your hand on your preferred closing date. Get your guaranteed cash offer today by scheduling your free home assessment.
