Fixing Financial Problems: When Is The Best Time To Sell Your Home?

No matter what kind of financial difficulties you run into in life, selling your home is always an option to get you out of them. With a robust real estate market driving high home values all over the UK, even small residences can net you many thousands of pounds.

However, the decision to sell isn’t an easy one for most people. Along with the prospect of giving up what is likely your most valuable asset, you’ll also have to leave your current living space and settle into a new one. That means leaving behind many memories, comforts, and maybe even friends and family.

So when should you think about selling your home over financial troubles, then? Below are three common scenarios in which it makes sense to make this hard choice.


1. When Your Home IS the Problem

Many people accidentally buy homes they can’t afford – at least not without severely stretching their budget. Financial experts recommend that housing costs take up no more than one-third of a person or couple’s after-tax income, but many exceed this soft limit and come to regret it once they realize how little money they are left with each month. Others wait to buy a home until they have more than enough money coming in to pay the mortgage each month, only to lose some of their income due to unforeseeable financial difficulties like illness or divorce. Because mortgages last so long, this second instance is particularly common; you would have to be very lucky not to have any financial shocks hit you over the 20 to 30 years that most mortgages span.

These people eventually realize that the high cost of their home is dragging them down financially, and if you’re one of them, selling that home is the best thing you can do to give yourself a brighter future. Once the house is gone, your money problems are too, and you can start to look for more affordable housing with the proceeds.

2. When You’ve Tanked Your Credit Score

Many periods of financial difficulty also have an impact on your credit score, and unfortunately this can affect your ability to make a normal recovery. When your score is too low for easy access to a conventional loan, your borrowing options become limited. You could probably still get some sort of loan extended to you, but it is highly likely that this borrowing arrangement would require you to agree to high interest fees that would make it extremely expensive.

Those high fees mean that borrowing is not a viable way out of financial troubles in this scenario. Since this is the best option that most people have when they have bills they can’t afford to pay, selling your house might be the only thing you can realistically do to get yourself out of trouble. Even if you are very reluctant to do it from an emotional standpoint, you owe it to yourself to consider doing it.

3. When You’d Be Leaving Anyway

The last case in which you might consider selling your home to help fix your money troubles is if moving is already on your mind. If you’re already considering relocating and you know that downsizing would help bring you out of your financial difficulties, why not do it?

Be sure to prioritize a fast house sale so you don’t have to wait months for the money to come in once you have chosen this solution; financial problems nearly always get worse over time, so you can’t afford to wait around and hope for a mind-blowing offer. Get the transaction done quickly and settle your money matters right away – once you’ve done that, you can safely look forward to the start of your new life.

Selling your home for a quick injection of cash should never be your first choice, but if you’ve considered the problem from all angles and can’t come up with a better solution, you shouldn’t hesitate to proceed with that course of action. Financial troubles won’t go away on their own, and while your home might be precious to you, it can always be replaced.