Selling your rental property will pay off your first mortgage and eliminate your debt. Is it a good idea in this housing market?

Dear Market Watch,

I have a rental property worth $175,000 and have $53,000 in debt. My primary home is worth $265,000 and I have $108,000 left on my mortgage.

My question is: Do you need to sell your rental to pay off your primary and forgive your mortgage, or do you need to refinance your rent and withdraw cash to pay off your mortgage?

signed,

worried about the market

big move‘ is a MarketWatch column that looks inside and outside real estate, from searching for a new home to applying for a mortgage.

Questions about buying or selling a home? Want to know where your next move is? Email Aarthi Swaminathan at TheBigMove@marketwatch.com.

dear concern,

Refinancing may not be the best course of action.

Mortgage interest rates are very high at 7.3%. mortgage news daily, for 30 years. If you have a 15-year mortgage or variable rate mortgage, you may be able to get a lower interest rate (although not much lower than what you could have gotten a year ago). So I’m wondering if it makes sense for you.

If you’re sick of renting, selling may be your best bet.

When you sell your rental, you: you For example, $175,000. In terms of rent, he can pay off his $53,000 mortgage and the $108,000 he still owes for his main residence, getting rid of the mortgage entirely.

Being debt free is psychologically very liberating. Plus, after deducting fees and other expenses, he still has over $10,000 left.

A small caveat though: adjust your expectations. The housing market is somewhat depressed. Sellers are making more concessions about unloading their homes. redfin
RDFN,
-9.70%
said a record number of homes sold each week, with price drops of 7.9% (up from 3.7% a year ago).

Being a landlord is hard work, but the prospect of being debt free gives you that kind of financial freedom.

This includes offering price reductions and offers to help buyers. Buy a home loan with a lower interest rateIf you think your home will sell at 2020 or 2021 levels and you receive multiple offers, you may need to consult your realtor and re-evaluate. But I’m not 100% sure your his $175,000 valuation reflects that.

Renting is currently difficult.Rent is falling, according to List of apartments, and the market is expected to cool further into winter.Like my colleagues, short term rentals are also currently struggling Levi Sumagaisai reported in OctoberAirbnb hosts say bookings have plummeted and they’re now turning to long-term rentals.

So if you find your monthly costs rising and you can’t raise your rent to cover your expenses, your profits will shrink and you’ll sell. Being a landlord is hard work. Plus, being debt free gives you that kind of financial freedom. If you think you can get a good price, sell the rental.

Make sure you are 100% sure. Once sold, there is no going back.

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