Hello! My husband and I have fallen into the constant cycle of debt. We bought our townhouse in Halifax Massachusetts in 2000 for $124,900. Since then we have refinance, paid off credit cards, racked up credit cards, refinanced etc etc etc…
We now have a mortgage of $155,000. We make appoximently $95,960 together. We also STILL have about $16,545. Our current mortgage payment is $1,261 with an addition $272 condo fees. We both have car payments of $350 each and our credit card payments are about $831 per month. Two of the credit card payments are at 1.25% loan that I have worked out with the creditor and the other is an installment loan that is actually $193 per month, but we pay extra on it to try to pay it down faster. If we continue paying the way we have the debt will be paid off in mid 2011. So the good thing about this debt is that there IS an end in sight. I just want it to be sooner. We would LOVE to sell our townhouse and buy a house. But we would have to sell it for at minimum $200,000.
The question is do we wait until we pay off the debt and have a better debt/income ratio? Do we sell our house now, and pay off the debt with the proceeds and have a smaller portion to put down on the new house?
I think the answer to your question lies in what you have learned through this cycle of debt and what you feel is more beneficial for your emotional health and enthusiasm for the life you lead.
So here is what it comes down to. If you are in the frame of mind that this is now the time for you to set your repeated credit excursions aside and to simplify your life then selling now makes sense since it would free you of all these things that are making financial demands of you.
However, if you honestly feel you would sell and get right back into debt again, (I know, everyone says they won’t) then sticking it out and using the debt snowball approach to finish the ditch digging out of debt is more of a practical solution.
So, you tell me. What is the goal you’d like to achieve?