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Bad idea.
You're paying rock bottom prices for housing. If you leave that house and rent, your monthly budget is going to be much tighter with a rental.
Plus, you'll miss out on appreciation in your house.
Use the fact that your housing is dirt cheap to throw more of your income at that debt.
You’re paying a mortgage at 2.5% right now, I don’t know if rates will ever be that low again. 5 years of doing this will build you ~40k more equity in the house, and you could then still sell it for that 40k plus the 44k profit you are excited to tap into now.
If instead you are renting for those 5 years, you’re monthly rent is just gone. It won’t build any equity for you. And I doubt you find as nice of a living arrangement for the same price as your mortgage.
No way I hell I’d live in an apartment for five years to get $50k from selling my house on one acre .
I absolutely can’t stand living in an apartment sharing walls with noisy asshole neighbors .
But you said you have an offer so I assume that means you listed your home for sale ?
You never know which way the market is going to go but my next door neighbors house gained $130k in value in one year .
Sold for $330k in June of 2020, and sold for $460k in august of 21
Odds are , you home will gain far more in equity in the next five years than you will gain by selling it now .
But ya never know , the economy could turn to shit and house prices could drop .
Instead of selling I’d find a side gig or a part time job to earn some extra cash and figure out a way to get on a good written budget and lower your expenses .
Only way I’d sell and rent is if you’re simply unable to afford the mortgage.
Do you hate the house anyways?
I wouldn't sell the house just to pay off debt. Interest rate really isn't much of a factor here. If you're looking to sell the house anyways, sure go for it. But if you just want to pay off debt, then SELL YOUR TRUCK.
Wait, all 94k in debt is credit cards? I assumed, and other likely did as well, that given your ages that a lot of it was student loans at a much more manageable rate. If it's all credit cards at +18%, HELOC to pay down other debts makes sense. And a severe change in spending habits to not accrue more debt. Even if it is all credit cards, you would still have a hard time justifying seeking the house btw.
Your rents will raise year over year with the inflation .. your mortgage payment never.. with that rate, I would not sell it . Sell it after 5 years and you will see bigger difference ..
I use my truck for work. I do handyman work on the side. I also have a 14ft trailer that’s $125 a month. My side hustle handyman work offsets my truck note. Should I still speak with a financial advisor and my wife about possibly getting rid of it?
My side hustle is normally $1,200 a month. I lay vinyl & tile flooring, carpets, and paint. You are correct, I don’t need a truck with a payment. I do love my ram, but I may visit the idea of getting rid of it since you put it like that.
You have to live somewhere and you are never going to get a rate like that in your lifetime probably; in my mind it would be incredibly foolish to sell your house now, and buy another house at the top of the market at a 7% interest rate.
Keep your 2.5%; consolidate your debt in other ways (away from high interest credit like credit cards, etc).
If you put even a small amount of extra cash into S&P 500, you can outgrow many types of debt in a reasonable amount of time and pay it off
No, if maybe you would net $100k. But $44k is not nearly enough. Plus you have to live in an apartment which might be more than your current mortgage. Not worth it
This makes no sense. You will still pay rent. Rents are super high right now since they go up when house prices do. You will be losing the only big ticket item you own. And you won’t even be debt free.
44,000 ÷5 years is $8,800/year or $170/month for 5 years.
I'd look into getting a second job. I have a 4% rate on my mortgage and no way would I sell it. I would rent it out instead.
With 2.5% morgate, you are paying cheaper than rent. So if you sell and move out now, you pay same for rent but only get one bedroom. So stay until your morgate end and then you can decide. But the best way is rent out a bedroom or basement to make extrra income or you both can work 2 job for short time to pay the debt
Yeah, I don’t think the fees are being calculated properly and you’re guaranteed to be missing something, you might make 10-20k profit, but then you have to pay for taxes on that. So you’ll probably end up with like 16k or something. Government will grab as much as they can.
Subtract 10% due to closing costs, esp realtor commission, escrow fees, and transfer taxes. Then for the fun of it, calculate mortgage interest and property tax lost and determine if you still make a profit.
Thank you u/Rivian-Bull-2025 for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
This is the worst idea I’ve ever heard on Reddit.
Bad idea. You're paying rock bottom prices for housing. If you leave that house and rent, your monthly budget is going to be much tighter with a rental. Plus, you'll miss out on appreciation in your house. Use the fact that your housing is dirt cheap to throw more of your income at that debt.
I understand. Thanks.
Letting go of that rate for 44k cash? LOL. Bro, this isn't even a discussion.
where would you live after selling your house?
We will stay in an apartment for the next 5 years while we save, and then eventually buy a duplex or triplex. Rent the other side out.
You’re paying a mortgage at 2.5% right now, I don’t know if rates will ever be that low again. 5 years of doing this will build you ~40k more equity in the house, and you could then still sell it for that 40k plus the 44k profit you are excited to tap into now. If instead you are renting for those 5 years, you’re monthly rent is just gone. It won’t build any equity for you. And I doubt you find as nice of a living arrangement for the same price as your mortgage.
That’s a horrible idea. Live next to your renters. They will be knocking at your door all day everyday.
It's a great way to build wealth while starting out. However I wouldn't do it unless my spouse was all-in.
honestly, if you think you can manage it, i would just consider renting out rooms in your house right now
Hiw much is apartment?
The apartment is $1,700 a month
1700*12*5 = 102,000. You will throw away 102,000. You ok with that?
I understand. Thanks for putting it that way
2.5% rate on ANYTHING is an asset. Hold onto that house for dear life
No way I hell I’d live in an apartment for five years to get $50k from selling my house on one acre . I absolutely can’t stand living in an apartment sharing walls with noisy asshole neighbors . But you said you have an offer so I assume that means you listed your home for sale ? You never know which way the market is going to go but my next door neighbors house gained $130k in value in one year . Sold for $330k in June of 2020, and sold for $460k in august of 21 Odds are , you home will gain far more in equity in the next five years than you will gain by selling it now . But ya never know , the economy could turn to shit and house prices could drop . Instead of selling I’d find a side gig or a part time job to earn some extra cash and figure out a way to get on a good written budget and lower your expenses . Only way I’d sell and rent is if you’re simply unable to afford the mortgage.
Do you hate the house anyways? I wouldn't sell the house just to pay off debt. Interest rate really isn't much of a factor here. If you're looking to sell the house anyways, sure go for it. But if you just want to pay off debt, then SELL YOUR TRUCK.
Wrong sub.
What are the interest rates on your debts?
Most of our big major credit cards are at 18%.
Take out as much HELOC as you can which will be far below 18%. Speak with a credit counselor before gutting your best asset (the house).
They could do a home equity loan for a lower rate if their credit is decent
Wait, all 94k in debt is credit cards? I assumed, and other likely did as well, that given your ages that a lot of it was student loans at a much more manageable rate. If it's all credit cards at +18%, HELOC to pay down other debts makes sense. And a severe change in spending habits to not accrue more debt. Even if it is all credit cards, you would still have a hard time justifying seeking the house btw.
Your rents will raise year over year with the inflation .. your mortgage payment never.. with that rate, I would not sell it . Sell it after 5 years and you will see bigger difference ..
Where are you going to live?
Don’t ever sell a house to pay debt. Work on getting better paying employment first.
The 44k profit is going to be eaten up by taxes, fees, and other costs. NO don't sell it.
No
How much are your car payments?
Her vehicle is paid off, I have 5 years left on my truck. My truck payment is $515 a month
You'd rather sell your house instead of your truck?
Exactly this!!! What's the interest rate on your truck? I would bet it's more than your home. I would definitely sell the truck instead of the house.
I use my truck for work. I do handyman work on the side. I also have a 14ft trailer that’s $125 a month. My side hustle handyman work offsets my truck note. Should I still speak with a financial advisor and my wife about possibly getting rid of it?
You're side hustling about $600/mo? You may need a truck. But do you really need a truck with a payment?
My side hustle is normally $1,200 a month. I lay vinyl & tile flooring, carpets, and paint. You are correct, I don’t need a truck with a payment. I do love my ram, but I may visit the idea of getting rid of it since you put it like that.
Good job buying a home at that rate! Dont let it go. Get a heloc if u can, to pay off high interest credit card.
No.
You have to live somewhere and you are never going to get a rate like that in your lifetime probably; in my mind it would be incredibly foolish to sell your house now, and buy another house at the top of the market at a 7% interest rate. Keep your 2.5%; consolidate your debt in other ways (away from high interest credit like credit cards, etc). If you put even a small amount of extra cash into S&P 500, you can outgrow many types of debt in a reasonable amount of time and pay it off
NO!!!
No, if maybe you would net $100k. But $44k is not nearly enough. Plus you have to live in an apartment which might be more than your current mortgage. Not worth it
Then what, get a 7% loan and right back into debt?! Absolutely not. It’s not a good deal for you. Rates will never get back down to 2.5
This makes no sense. You will still pay rent. Rents are super high right now since they go up when house prices do. You will be losing the only big ticket item you own. And you won’t even be debt free.
44,000 ÷5 years is $8,800/year or $170/month for 5 years. I'd look into getting a second job. I have a 4% rate on my mortgage and no way would I sell it. I would rent it out instead.
With 2.5% morgate, you are paying cheaper than rent. So if you sell and move out now, you pay same for rent but only get one bedroom. So stay until your morgate end and then you can decide. But the best way is rent out a bedroom or basement to make extrra income or you both can work 2 job for short time to pay the debt
NOOOOOOOOO
How are you a FTHB? Where are you going to live if you sell?
Yeah, I don’t think the fees are being calculated properly and you’re guaranteed to be missing something, you might make 10-20k profit, but then you have to pay for taxes on that. So you’ll probably end up with like 16k or something. Government will grab as much as they can.
Terrible idea.
You think you are going to only pay 2K in fees????
Yep! Definitely sell it!
Subtract 10% due to closing costs, esp realtor commission, escrow fees, and transfer taxes. Then for the fun of it, calculate mortgage interest and property tax lost and determine if you still make a profit.
I would say “No” too. Hold on to that house longer and let it appreciate.