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Pay off all my debt with sale of inherited home? Looking for 2nd opinions on my plan.
I sold a home I inherited and will net about $115k (profit). I do have a mortgage on my current home of about $50k, about $20k on my car loan, and about $7k in personal loan and credit card bills. My plan is to take the profit from the sale of the inherited home, and pay down all of my debt. If I did that, I'd be left with a little more than $30K in the bank and debt free! I could then add more to my retirement account and be on my merry way. My gut tells me to do just that. Is that what you would do in my situation? Would you keep the mortgage?
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I would pay off all that debt if I were in your shoes! It could also make sense to keep your mortgage if you have a rock-bottom rate locked in. Then save aside some emergency savings and invest the rest. No wrong answer here and entirely depends on how you think you'll best manage your financial situation given those two options. Good luck!
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@John971 Yes, my inclination is to get rid of all my debt. I'll have to make sure I don't get into debt again!
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Congrats on being in such an enviable position! My first thought is, definitely pay off your high-interest debt (personal debt?). My second thought is, whether you pay off all your debts or invest the rest of the proceeds from home sale very much comes down to what you view as your own priorities and your gut feel. Dave Ramsey would tell you to pay off all the loans first. But I'm not a Ramsey fan. If you think your money is better spend investing for retirement, and if your other loans are low-APR, maybe you just want to work towards your long-term goals. Especially if your loans are low interest.
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@Sam592 Thanks! My mortgage rate is actually 4%. I haven't refinanced although I probably should have. I guess it's not too late to do it now. I will probably pay this off but I'll keep polling and asking others. Not in a rush :)
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