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.


  1. Love it, Kim!

    This is why, when people used to tell me “my house is my biggest investment!” I’d cringe. Your house in reality is a place chock-full of emotions (not what you want for an “investment”). Because of that, you have thoughts like, “I could move from this area I love to pay off debt!” Ouch! Great neighbors and a great neighborhood are hard to come by. If it were me, and I’d found a great neighborhood, I’d stay.

    1. It seems the neighborhood is worth more than the house, so I think we do need to stay. I do like that our house has equity, but I don’t want to assume we can sell it and live like kings someday. That is a horrible strategy for retirement!

  2. When we entered our debt management program, it probably would have been wise to sell our home and downsize to save on the monthly payment. But we love our home as well, and the neighborhood and all that comes with it. I told my wife that I didn’t care how many night and weekend jobs I had to take, we were NOT selling our home. It just felt like the one thing we could hold onto that made it all the other sacrifices worth while. It was our fortress, and our last stand against debt. Within those 4 walls, debt couldn’t touch us. Here we are, 4 and a half years later – done with our DMP, and still in our home. Looking back would I have done the same thing? Hells Yes.

    1. I can hear you about wanting to keep the house. It gets emotional when you have so many memories. You guys are just awesome.

  3. I’m not a homeowner, so take my thoughts with a grain of salt, but I’d vote to stay. Those positives are huge, in my opinion. Your profit from selling the house will likely still exist when you’re ready to sell (at least to a similar extent, or potentially even grow) and the fact that you can’t rent your house is really a non-issue until you officially decide to take time to travel (for example). Cross that bridge when you get there! In the meantime, maybe you can consolidate your living space into a smaller section of house to close off rooms from heating or air conditioning or use that acreage to work for you while gardening or whatever.

    1. Good point. I don’t need to rent my house until I’m going somewhere. We do have the extra bedroom space all closed off. It’s like a frozen tundra sometimes in there!

  4. That’s a tough one Kim. I think you could argue a reason to stay and go and be wise about it. Looking at both, I’d likely stay in the house, especially considering the rate you have. I hate moving as well, so I’m a bit biased with that one. That said, having a paid for house isn’t too shabby at all…no help at all I know. 😉

    1. No John, that was no help at all and kind of how I feel. I think we’ll stay put for now. You don’t always have the best luck with neighbors, but we have hit the jackpot with the ones we have right now.

  5. I may be a bit different than most, but I don’t mind having the profit “on paper.” Yes, it’s only a true profit if you lock it in through a sale, but you are up over 200k right now according to the appraisal, you like your neighborhood, you hate moving…seems like staying put makes a lot of sense!

  6. Given those pluses and minuses, I would definitely stay … for now. But keep your eyes peeled for a home that was still close to school, had some space between neighbors but wasn’t on 3 acres, and is a little smaller. You never know if that perfect house will pop up on the market. Then hire movers to help with the moving, because moving really sucks!

    1. We might never move just because I hate packing, and we have a lot more stuff than when we moved in!

  7. My father in law always says he is going to sell his big house/land and move to Florida to live in a trailer park where he won’t have to do any home repairs or land maintenance of any kind. Personally in your situation I’d stay put. Selling your house might seem like an easy out, but I think I’d regret not having as much space or land to move around and do what you want. Plus if you’re already happy with the neighborhood, that alone is priceless.

    1. After 10 years, I still really enjoy pulling into the driveway and seeing the yard and our great view of the mountains. I’d certainly miss that.

  8. That’s a tough question for sure.

    Looking at the financials alone, my own thoughts would be towards selling up. It seems like you’re in a good financial position and selling up and moving your money around as you describe could cause some seriously positive changes (and long term rewards).

    That said, focusing on my heart rather than my head, I’ve lived in some great places and some, how shall we put it, not so nice places. A nice neighborhood, peace and quiet, good neighbors. These are the kind of things that it’s very difficult to buy and that you often don’t realize until you’ve lived somewhere long enough.

    I’ve moved to places that seemed perfect only to discover I had the neighbors from hell etc. I’ve also had such unpleasant people move in close by that I ended up throwing in the towel and moving so I didn’t have to put up with their noise/mess/rudeness all the time.

    Seems like a head vs heart argument.

    What kind of person are you? The way you think will, I believe, influence how happy you are with the outcome of this sizable decision!

    1. I’d love to say I use my head most of the time, but honestly, where we live, how we work, etc is mostly from the heart. We could probably make more money if we lived somewhere bigger, but we really enjoy the small town life, and the cost of living actually can’t be beat. It has taken a while to realize how great our neighborhood is and it would be very hard to replicate.

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