As unemployment rises and wages are frozen or hours are cut, many households are feeling the financial pinch. Every day necessities that used to paid for with cash are now being put on credit cards. As credit card bills climb, they begin to compete with the mortgage for available cash. Then the question looms “Do I pay my credit card or my mortgage?
The answer is….depends. First, do you have equity in your property? If the balance of your mortgage is less than the value of your house, strongly consider paying the mortgage. It keeps a roof over your head and if worse comes to worse, you can always sell the property and go rent for awhile. If your property is located in a declining real estate market (e.g. Las Vegas, Florida, California, Minneapolis, Michigan, etc.) you may want to sell your property and cash out now before the depreciating market eats up what is left of your equity.
No equity in your property? Then this is a no brainer. Pay your credit cards. If you are in a position where credit card debt competes with the mortgage, you are a candidate for a short sale. Call me, I am a Minnesota short sale Realtor and can walk you through the process. You may reach me at 612-554-5901. All calls are returned in 24 hours.
{ 3 comments… read them below or add one }
Thank you for this post. Great blog!
What if the value of my mortgage is about equal with the value of my house?
Then it is up to you what you want to do.