10 Things to Consider Before Selling Your Home
The decision of releasing equity from your home is a difficult one. Not only will you have to think about the emotional toll, but also the potential financial implications of this decision. It’s important that you are informed before making any decisions, because there are some things you should avoid when considering releasing equity from your home.
First mistake is not understanding the tax implications. When you sell your house, the IRS considers any profit to be a capital gain and taxes it at 20%. This is true even if you use all proceeds from selling your property to buy another one as long as there was some money left over after closing costs and moving expenses. Keep this in mind when deciding on how much of equity should be released for what reason.
Avoid thinking that home values will always go up. Home prices have been skyrocketing over recent years due to low inventory levels but no guarantees exist that housing prices cannot dip or flat line again – especially with interest rates near historic lows (which means they can only go up). Reviewing trends and the current market conditions that exist in your geographic area will help to ensure you have a realistic understanding of whether or not releasing equity from your home is likely to be an effective strategy for long-term financial goals.
Donßt sell too quickly because it seems like the answer. The housing crisis proved that those who sell their homes too soon can end up regretting doing so when prices fell dramatically and they were forced into foreclosure. Reviewing trends, researching what’s going on in our markets today, and having a plan are all important considerations before deciding if now is really the best time to release equity from your property.
It’s also helpful to consider how much outstanding mortgage debt – including interest rates – you’ll owe after you sell your home.
Make sure to have a plan for where you’ll live after the sale is complete. Many people struggle with this especially when they’ve never had to find their own place before or if they don’t have other family living close by who can help them out in setting up a new residence. It’s important that you are prepared and know what kind of monthly mortgage payment (including interest rates) it will take on an average salary like yours, as well as how much time you may need to save up some more funds for necessary expenses such as redecorating, moving costs, etc.