Stay in current home and pay off the mortgage in 5 years? Or sell current home, move, and pay off $17K credit card debt?

Should I stay? If I stay in my current starter home, it will be paid off within 5 years. Pros: no mortgage. Cons: my house is farther from my kid's school than I'd like to be, the house will need a new roof soon, and it has a small addition that is settling and has developed a 3/4" crack where it joins the house. The prospective buyers know this and are okay with the house as-is, since they have a construction business.

 

Or should I go?  I could sell my current house for $105K and end up with somewhere between $51K and $61K after closing costs. I'd put these funds toward the down payment and closing costs on a modest house in the $150K to $175K range, and then have enough money left over to pay off the $17K in credit card debt that piled up before I started YNAB.  Pros: no more credit card debt, a house that's a little bit bigger for my two boys to grow up in, better neighborhood . Cons: A new 30-year mortgage (though at least mortgage interest is deductible, as opposed to credit card interest), presumably inheriting other house maintenance projects at a new house.

 

I also have a car loan for $12,500. Moving will be relatively inexpensive since it's an in-town move (<$500). 

 

It seems like there's not a single right answer here, but I'd be interested in hearing what y'all think.

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    • nolesrule
    • YNAB4 Evangelist
    • nolesrule
    • 8 mths ago
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    Beige Device said:
    (though at least mortgage interest is deductible, as opposed to credit card interest)

     Small detail, but have you verified that you would still itemize under the new tax laws with the higher standard deduction?

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    • nolesrule Excellent point. I usually take the standard deduction. So maybe that bit about mortgage interest really isn't relevant?

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  • It depends you have two options:

    1) stay where you are and keep amortizing your mortgage so in 5 years you own your house free and clear. Not many people can say that. Then you focus on paying down CC debt. 

    2) you sell your home and w/ proceeds you pay off credit card debt and buy a bigger home. 

    How much nicer is this other home? Is it a big upgrade? You mentioned you have kids, this could be an important factor driving you to upgrade. 

    On one hand I think owning your home free in clear in 5 years is awesome, and on the other i think 17k in credit card debt is insane. Regardless of your choice you need to prioritize paying that down.

    In the event you decide to stay in your current house, you could apply for HELOC and balance transfer that  CC balance to your HELOC @ approx 5-6% interest 

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