Key takeaways
- Know your equity before making a decision.
- Sell if debt is piling up and you are falling behind.
- High mortgage costs can signal it is time to move.
- Selling can be smarter than taking on more loans.
Let’s be clear from the start: selling your house is a major decision—and not one you should take lightly.
You have likely spent years investing in your property. Whether it has gained value or not, it is still a deeply emotional investment.
At Sell2Rent, we believe you should not sell your home (and mind you, buying homes is our business) unless you fall into one of three clear scenarios.
But First, Make Sure You Have Equity
Before we jump into the signs, here’s an absolute must: you need to have equity.
You can calculate your home equity with this simple formula:
market Value of Your Home – Mortgage Balance = Equity
To get a realistic estimate of your home's value in today's market, we recommend subtracting 20% from the current market estimate to account for price corrections.
1. You’re Struggling With Credit Card Debt
If your credit card balances keep climbing, and you are only making minimum payments while interest keeps compounding, you may be headed toward foreclosure or bankruptcy.
These outcomes can wreck your credit score and limit your ability to secure future loans with favorable interest rates. Worse, your lender could end up selling your home for less than it’s worth—sometimes just 50 cents on the dollar.
If you are in this situation, selling your house—or another major asset—is not just a smart idea, it’s something you should seriously consider doing soon.
2. Your Mortgage Is Too Expensive
Mortgage rates are still elevated. As of April 2024, the average mortgage interest rate sits around 6.88%, and the average monthly mortgage payment is approximately $2,700—not including other housing expenses.
Now, add in:
- Property taxes
- HOA fees
- Insurance and repairs
If your total housing costs exceed 25% of your monthly income, then you may be house-poor. Downsizing or transitioning into a rental can be a smart financial reset.
Source: Bankrate’s mortgage analysis
3. You’ve Had a Major Financial Setback
Life happens. Job losses, unexpected medical bills, and other financial curveballs can shake up your budget. While some homeowners consider HELOCs (home equity lines of credit) or personal loans, those can carry long-term risk—and potentially lead to bankruptcy.
Instead, it may be smarter to leverage the equity you’ve built in your home to cover short-term challenges. Selling now might save you from worse outcomes later.
Bonus: Want to Sell but Stay in Your Home?
If you relate to any of the above situations—but dread the stress of moving—we have a solution made for you.
At Sell2Rent, you can sell your house, use the proceeds to solve financial challenges, and stay in your home as a renter. This means:
- No need to uproot your family
- Cash in your hands quickly
- Time to recover without changing your environment
Learn more about our leaseback program at:
Comments