Signs that you should probably sell your house

By Neal McNamara | May 18, 2014
Home Prices

How do you know when you should sell your house, like, right now?

When you’re paying half your monthly income toward a 30-year mortgage on a tiny home.

KTTH financial guru Dave Ramsey recently spoke to Renee, from Canada, who was seeking advice about the stress her housing situation is putting on her family.

Renee and her husband’s monthly take-home pay is around $4,000. Their biweekly mortgage payment is $1,000, or approximately $2,000 per month. Ramsey balked at that arrangement, commenting that Renee and her husband and two kids must be “drowning.”

Renee agreed. But, they have a way out. Renee said she could sell the house, pay off $8,000 in debt, and still have around $50,000 left over. The family would put $25,000 in savings.

Since Ramsey usually warns against 30-year mortgages, Renee wondered if they should sink their remaining $25,000 into a new home with a 15-year mortgage. But Ramsey nixed that idea, saying that if they’re paying $2,000 per month for a 30-year, they probably won’t pay less for a 15-year.

Adding to the mix is the husband’s career. He hurt his back several years ago, and has been working a menial, low-paying job while he heals. Renee earns more working part-time than her husband does working full-time.

Ramsey advised that the family sell the home, live cheaply in a small rental for a few years, and focus on getting the husband back up to his full earning potential. By then, the family will be out of debt and likely in a better situation to afford a home with a shorter-term mortgage.

comments powered by Disqus
Top stories
AM 770 KTTH's Amtrak contest
AM 770 KTTH and Amtrak want to send you and a guest to Portland, Oregon for a fall weekend getaway September 25th through 27th! Click here for details

Don't miss
  • debate
    Audio: The Fight For the White House Ben Shapiro, Michael Medved and David Boze analyze the current crop of GOP presidential hopefuls, with an eye towards who can best take back the White House and defeat Hillary Clinton. Moderated by Jason Rantz.

Don't miss
  • debate
    Video: Gun rights debate In KTTH’s third Freedom Series Debate, hosts Ben Shapiro and Michael Medved sat down with KIRO Radio’s Dave Ross and Ralph Fascitelli, President of Washington Ceasefire, to take on initiatives 594 and 591 and other gun rights issues.

Don't miss

Don't miss

Real Estate Corner
  • Robin's Real Estate Reality Talk
    Robin's Real Estate Reality Talk We are in a very unique market. Right now our area is showing signs of recovery. We are moving in a positive direction and gaining equity though are ways off from where we were in 2006 and 2007.