Should You Downsize Your House To Get Out Of Debt?
Is it ever a good idea to sell your home and buy a smaller, less expensive one in order to get out of debt more quickly?
It’s a good idea in some situations. If you don’t really like the house, or maybe you were thinking about selling it anyway, then I’d say go for it. It would also be a smart move if you simply have too much house and the payments are eating you alive.
I usually recommend that your monthly mortgage payment or rent be no more than 25 percent of your take-home pay. If your house payments are taking 40 to 50 percent of this figure, then it’s time to unload the house.
But selling your home can be a tough thing emotionally. I’d never advise someone to sell the place they love and move down in house if their payment is reasonable. In these situations there are usually other areas where you can cut back, keep your home, and still get out of debt in a reasonable amount of time.
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