Finish One Before Taking Another
Leticia isn't sure where to put her current mortgage debt. Does it belong in the debt snowball, before they buy a new house?
QUESTION: Leticia is building a new home while they have $62,000 on their current mortgage. Their current home is worth $130,000. The new house will cost $200,000 and they’ll put $20,000 down. They make $125,000 a year. Do they debt snowball that $62,000 or sell the house and put the equity toward the new mortgage?
ANSWER: I would sell your current house and use that money to put more down on your new house so you can pay it off sooner. When that’s done, I’d save up and pay cash for rental properties. We want to get out of debt, and then do investments.