Being in debt is nothing to be ashamed off. Debt is one of the biggest problems in America, and you are definitely not the only one. When you end up wondering about how you will cover all the expenses, it seems like a good idea to sell your house to pay off debt. However, before you make such a big decision, you should ask yourself couple of questions first.
When you are faced with mortgage debts, and foreclosure is coming near, then maybe it is a good idea to sell your house to pay off debt yourself. This decision is not to be made lightly, however, as you should be sure that the sale of your Milwaukee house will benefit you. How much debt do you have? Will you be able to make a profit? Below are questions that you must ask yourself before you make a final decision on whether or not you should sell your house to pay off your debt.
1. How Much Money Will You Make on Your House?
Just because you’ve made a sale on your Milwaukee house doesn’t mean that you’ll make a profit on it. Your sale proceeds are based on the amount of a down payment you’ve laid out before, how much of your loan is paid and your house’s worth. Before you sell your house to pay off debt you first must know exactly how much you owe, so you can be sure the sale of your Milwaukee home pays off.
First thing you have to do is to contact your lender and to request your payoff amount. Keep in mind that the payoff amount is not the same as your current balance! If the amount you would make on a sale of your property is less than the balance on your mortgage, then it isn’t a productive idea to sell your house to pay off debt.
The good thing? If you’ve bought your house during the crash, the worth of your house is probably much higher now than it was, maybe even several times higher. This means that you have much more equity in it, and that means more money for you.
However, there is another problem. Selling your house is not a cheap process. You must also calculate the cost of repairs, commission costs, taxes, and other unpredictable fees. If you want to avoid these expenses, you can always sell your house to a professional buyer, such as Sparks Property Investors LLC. We will buy your house in whatever the condition, so you won’t have to worry about additional costs.
2. Are You Prepared to Move out?
You are probably aware that when you sell your house to pay off your debt you will have to move out from your current home. This is an emotional moment as you probably have a lot of memories that tie you to the property that you’ve spent a lot of time in. If you feel like having to sell your current home is a decision that would leave you devastated, maybe you should consider checking out some other options for clearing up your debt, which may include cutting back on spending, selling off some household items that you don’t need, asking a family member for a loan or debt consolidation.
3. How Big Is the Rent in Your Area?
When you’re in debt, it often times sounds more appealing to rent a place to live instead of getting stuck with another mortgage. This is another decision where you have to do a lot of calculation if you want to sell your house to pay off your debt. And, numerous studies such as those conducted by NerdWallet and Trulia have shown that renting prices vary greatly depending on the state you live in. Make your own research and thread carefully so you don’t make a mistake when you sell your house to pay off your debt.
4. Are the Risks Worth It?
Selling your house to pay off debt may seem like a great idea in your head, but you must know that the risks are large and that you should have good knowledge about your own situation if you want to know with certainty if it’s worth all the trouble you would go through. For example, qualifying for a second mortgage is a lot harder, as when you have one property, the chances of you truly needing another one are small. If you decide to rent for a while, renting may be even more expensive than paying a mortgage, and you might find it hard to afford buying a home later on. Also, even when you list your property for sale on MLS, you are still responsible for paying mortgage and all the bills and insurance until the sale of your property closes. This may take months, which will cost you another several thousands of dollars.
Another good option to cut on your expenses that has less risks than selling your property in Milwaukee, Wisconsin is to downsize your home. However even downsizing costs money, which may end up being even more expensive than the costs of selling your home. You must always look at the whole picture and then make your decision wisely.
One more option to consider is selling your house to a direct buyer. We will buy your house as is, for as quick as a week, and we will pay you in cash. This way you will avoid any unexpected expenses, and you will know exactly with how much money you are left with.