4 Times When It’s Financially Wise to Sell Your House
Sunday, November 15, 2020, 6:00 AM | Leave Comment
One of the benefits of owning a home is that you don’t have to wait for a lease to expire before you can move to a new property.
Instead, you can simply sell it to another person and move on with your life.
Let’s take a look at some reason why you might want to transfer ownership of your house to another person or entity.
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You Can’t Afford to Make Timely Mortgage Payments
A job loss, unexpected illness or other issues may result in either a loss of income or increased monthly expenses. Ultimately, you might not be able to stay current on your home loan. Instead of risking a foreclosure, it may be in your best interest to sell the property as quickly as possible. If you don’t have positive equity in the home, the lender may agree to a short sale.
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You’re Planning to Retire Soon
Ideally, you will have little to no debt as you head into retirement. If you haven’t finished paying off the mortgage on your home, it may be a good idea to sell it and use the equity to purchase a less expensive property. Selling your current house might also be a good idea if you are planning on moving to a new city or state to enjoy the fruits of your labor.
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A Divorce Is on the Horizon
When you sell a home, the first $250,000 in profits from the sale are exempt from capital gains taxes. If you are married, that exemption increases to $500,000. Therefore, it may make sense to come to an agreement with your spouse to liquidate the property before the divorce becomes official to take advantage of the larger exemption.
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It Becomes Less Expensive to Rent Than to Own
As economic conditions change in a given area, it may become more expensive to own a home than it would be to rent a home or apartment. In such a scenario, it might be in your best interest to sell your home and use the proceeds to pay down credit card debt or take other steps to strengthen your financial position.
Selling a residential property can be a complex process that might take weeks or months to complete. Ideally, you will do so with the help of a real estate agent or other professionals who have your best interests in mind. However, after the transaction is complete, there is a good chance that both your bank account balance and credit score will increase significantly.
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