Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Credit Scores
Profile Image

Question By
jakewill05

25 Contributions
48 People Helped
Selling my house and consolidating
I have about $125,000 equity in my house and about $40,000 in debt between 2 car payments and 14 student loans totaling about $1,000 in payments each month. The student loans are between 5-10 years old and the cars are a each a couple years old.
If I sell my house, should I pay off all my debt and use the rest as a down on a new house or should I just put it all down on a new house and keep my other debt?

Option C involves cocaine and hookers, but that never ends well...

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
495 Contributions
212 People Helped
Most Helpful Response

Helpful to 1 out of 1 people

I would double check with a tax person before making a choice.  You do not have to claim earned (difference between buy and sell upto 250k) money on a house sale for a one time down grade in house (old rules) but could only do that once.  Otherwise they expect that all monies will go into the new home, so double check on that so that you do not lose that advantage for retirerment.  If the one time rule is not there anymore, then I would use it to pay at least any high interest rate loans.  If they are near similar interest rates to your mortgage, I would dump most back into the new home if you can afford all the payments comfortably. This lowers your monthly house note, and you pay off more of the debt sooner, espicially with the car loans, no sense paying for a car for 15 to 30 years in your house note unless it is high interest.  The school loans should be a pretty low interest rate also, but compare them and see.

Top Contributor

Reply by
jakewill05

25 Contributions
48 People Helped
Helpful to 1 out of 1 people

Thanks. There's not any tax consequense on the sale of the house. My thoughts on the rest are pretty much on point with what you were saying.

Top Contributor

Reply by
Nomadre

495 Contributions
212 People Helped

One other thought is that i do not know if you can claim interest on school loans for taxes. If not then it might be worth looking into rolling those over into your new home loan.  School loans are typically long term, so if you can save a touch on interest and be able to increat your tax writeoff then might be worth it with the school loans.

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.