With the house and total debt, we owe about $195,000. House value is around 230,000. Would it be worth it to sell the house, payoff the mortgage, and then pay off the debt or would this be a bad move?
2007-11-02 15:38:31 · 7 answers · asked by thekilpatrickfamily 2 in Business & Finance ➔ Renting & Real Estate
it can be a smart move. broke people should not buy homes.
when you can put 20% down on a 15 year fixed rate loan, you have no debt, and 3-6 months living expenses saved up for emergencies, then it's time to buy an affordable home.
2007-11-02 15:42:47 · answer #1 · answered by Anonymous · 0⤊ 1⤋
You state you 'owe about $195,000' but you didn't mention if you are meeting your payments every month. If you are just feeling pressured because it doesn't appear the debt is going down, then I'd say keep the house and cut unnecessary spending to the bone.
If you are having a problem making your payments on the house, utilities and basic living expenses then maybe restructuring your home loan is the answer.
Attempting to sell (don't know where you live so take this with a grain of salt), may mean you will have the house for at least another year. Currently, it's harder for buyers to get new mortgage loans. If you can take less than what the appraised value on your home is stated, then maybe look into finding a tenant with a good job, plans to stay in the area and at least $5,000 then structure a lease with option to buy.
How much equity do you have in your home right now? Forget appraised value because a house is only worth what someone is willing and able to pay for it. Appraisals look good on paper, not based on 'money in hand' reality however.
Before looking at selling as the only solution, find a couple good forums online where investors can advise you. This is a big step and should be the option of last resort.
2007-11-02 16:01:35 · answer #2 · answered by G N A 6 · 1⤊ 0⤋
A house is not considered bad debt. You don't say how much debt or what sort that you have. You can always take an equity loan providing you have equity in the home which it seems that you do. Refinancing the mortgage and including credit debt in it is often a good way to get out from under. The real estate market is awful right now so selling is probably not a good idea at all at this time. Look into refinancing and consolidating. I think that may be your best bet.
2007-11-02 15:51:46 · answer #3 · answered by demurewoman2001 2 · 0⤊ 0⤋
My question is how did you determine the homes worth? by what you paid for it? By what similar homes are now selling for in the neighborhood? These questions are especially important if you live in CA, NV, FL, MI, OH etc as home values are deteriorating so far almost 25%. The homes worth is determined by how much the market is willing to pay, and in today's market that is going down. Check out the market you are in first, before making any decisions, that might be detrimental to you
2007-11-04 07:59:09 · answer #4 · answered by Pengy 7 · 0⤊ 0⤋
i would sell now if you can get your asking price (not lower) and let the market decline for what I believe will be longer than a year. Then buy back in on the lowside. Of coarse this is gambling but if you read & research you may feel the way I do. Homes are overpriced, way overpriced in many places.
Spend less than you save is common sense.
2007-11-02 17:24:43 · answer #5 · answered by cafemoto 1 · 0⤊ 0⤋
Right at this second in time, it would be a very bad idea. The real estate market is dropping almost every where in the nation, hence getting less for you house... wait it out, probably with in the year it will be booming again. Then sell...
2007-11-02 16:09:17 · answer #6 · answered by Mommy to 1+triplets 6 · 0⤊ 0⤋
Yes, sell the house and pay off your debts. You'll still have $30,000 to get another place. All that debt can drive a person out of their minds.
2007-11-02 15:46:47 · answer #7 · answered by Anonymous · 0⤊ 0⤋