Would You Sell Your House If It Meant Debt Freedom?

debt freedom by selling our houseI swear being middle aged has sent me into considering all sorts of financial schemes to pay off debt and become financially independent. First, we were going to try and pay off our house within 5 years. Then, I felt an urge to sell everything and live in an Airstream trailer. Those ideas were probably a little ambitious or just plain nuts, but I can’t shake the seed of an idea that has grown into a real possibility as the housing market is starting to pick up where we live. We could actually sell our house and make enough money to pay off one of our rentals and buy a smaller home outright, which pretty much means debt freedom forever. Should we sell our house to pay off debt?

Being the financial blogger that I am, any big decision needs a list of pros and cons, so here we go.

Yes, You Should Sell That House!

-We owe about $150,000 on our home mortgage. Our house appraised for $375,000 a couple of years ago.  With sales in the area, we could get our appraisal price, but to be conservative, I’d say that we could count on $350,000. That leaves $200,000 in tax free profit! We could pay off our residential rental and still have $150,000 to purchase a really small updated house or a larger fixer that we could make our own.

-Our house is too big. Yes, I said that. When we built it, I can’t tell you how many times we were told to build the biggest house you can afford. This is what listening to the Joneses gets you. Although, we are well within what we can afford, our house is still way more space than we need for three people. Bigger house means more furniture, more heating, more repairs= more expenses.

-We have too much land. Our lot is just over 3 acres, which sounded idyllic when we bought it. A big house with acreage, isn’t that the American dream? Maybe if you raise cows, crops or hogs, but we only have one dog and a few house plants at them moment. Three acres means much more mowing, landscaping, weed control and prairie dogs (they are cute but carry the plague and dig up your yard!). I always want a yard, but we could do with a much, much smaller one.

-HOA has rules. We live in a neighborhood with an HOA. I’ve heard horror stories about HOA’s, but ours isn’t too bad. It’s only $350 per year and it makes sure no one lets their house look too trashy. However, the one rule that really bothers me is that we are not allowed to rent our house. If we decided to take a year off to travel, we’d either have hire some sort of caretaker or sell our house before we go.

No, You Better Stay Put!

– We have a super low mortgage interest rate.  It is fixed at 3.25% , and with our current payment schedule, we’ll have it paid off in 8 years. If we live here for another 10-12 years or longer as we planned, who knows how much our house might be worth?

-We love our neighborhood. We have awesome neighbors, a great place to ride bikes and play outside, and the views are really, really amazing. We feel very safe here as well.

-We like space. As much as it is a hassle to clean and mow, we like our space and not having a house right on top of us. When we lived in town, the neighbors were very close and we saw and heard way more than we needed to. (Yes, drug dealer living in an RV behind your parents, I’m talking to you)

-We live close to school. We are right over the border to make us out of district for our daughter’s school, but it still is only a ten minute drive to actually drop her off or a one minute drive to the bus stop when she gets older. If we moved into an area where we could buy a house outright, it would make lots more driving time.

-I hate moving. I’d rather do almost anything than pack up and move!

I’m sure there are a million more reasons to move or not move. As of now, we like our living situation too much to want to sell, but who knows what might happen in the future. I’m just very glad that we didn’t end up house poor. I think we got approved for something like $385,000 to build a house and we ended up borrowing $215,000. While I think a house in our neighborhood could sell for $385,000, getting a $200,000 profit on something that expensive just wouldn’t happen here, at least not for many years. Thank goodness we didn’t listen entirely to the Joneses!

Have you ever sold a house to pay off debt? Would you stay or go in our situation? 

Image Credit: Freedigitalphotos.net/jscreationzs

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Written By
Sydney White is a Texas-born stay at home mom who enjoys spending time with her family, bargain hunting and, of course, writing. She is currently the editor-in-chief of Snipon.com.

51 Comments

  1. I’m curious to know if anyone has sold the house on this feed to be debt free? Did you pay off debt? For those of you who did, do you regret selling? Our income has been cut in half and while we can still afford the home $ is tight. I don’t like the cloud of debt hanging over our heads. We caught up with the Jones but im ready to throw in the towel. Our thought are purchasing a travel trailer, paying off debt, purchasing land cash, and building a barndominium. If anything we would be financing half of what we have now.

    1. Shoots hand up!! I did! best feeling ever!!!!!!

      Im actually about to blog the whole experience. long story short.. I sold my paid off condo, and got Waaaay more than I paid/ or expected, all to knock out the last bit of my 40k debt. I still have a pretty nice nest egg from the condo proceeds that most would use as a hefty down payment on a new home… but I plan to save and invest.. and without all of the monthly loan payments that just pecked at interest, my son an I would be able to save more than 50% of my take home, not to mention that I would be able to contribute more pre-tax funds, lowering my tax bracket meaning lower taxes and more credits at the end of the year..
      As far as living, Im here in South Charlotte where the cost of living is rising but still very decent, so I found the cheapest apartment in a good part of town to rent for a year while I save.

      A little about me,
      Im a single mom age 29,making an average salary, living in Charlotte NC

  2. Many people do the same mistake as you…. Try to have the biggest house possible… If I were you I would sell the house and move to one that is smaller…it will be more affordable and it will suit your needs better! Good luck! Thanks for sharing!

  3. I’m strongly considering selling my home to get out of debt. I’m 52,000 in debt with no end insight. Paying just the minimums required and seeing no real movement in the balances. I began to accumulate debt when my mother had an aneurysm in which she was in recovery for 3 years. I exhausted all of my savings to provide her with what she needed. I live in an area where real estate is booming. I have 65,000 in equity and will be selling the home myself to save on realtor fee’s. I believe selling and getting out of debt will alleviate my stress and enable me to move forward emotionally, mentally, and financially. I will be able to purchase another home, replenish my savings in approx. 2 years of being debt free. Debt is so burdensome! I cannot wait to breath!

    1. I’m so sorry that happened to your mother, but thank goodness you were able to take care of her. I think I would do exactly what you’re planning if I was in the situation.

  4. We are in the SAME situation–owe 268,000 and appraised at 439,000…we are 31 and want out of debt and fast but love the school and area (although I have no bff for neighbors) it is a safe area and I feel safe here…also debating!

    1. I go back and forth, but we’ll probably stay where we are. The house will be paid off in a few years and I don’t really want move.

  5. It sounds as though you should stay put for now. But you can keep an eye open for neighborhoods or homes that you might consider down the road, and perhaps the perfect house – smaller and less expensive – will come up one day. Don’t forget to include realtor fees and moving expenses when you are calculating your potential profit!

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