Sell or not
Dear Terry,
My Big Sis Jan says you say not to sell our twenty acre forest land for about $88,800 to pay three loans we have totalling $86,301.44 at an interest rate of 6.74 on $36,301.44 and 2.95 on the rest. I want to be debt free and not have almost all of my SS deposit go towards loan payments that includes interest. She says that you said it is better to have loans on the house when you sell the house to go into an old people’s home. She is 73. I am 69. We have lived in this home all our life. Who’s right?
Terry Says
It makes absolutely no difference to have loans or not when you sell your home. Are you getting a fair price for the forest land? Do you trust the person making the offer, and have you checked for comparable offers?
I think it makes sense to sell the land (you might have to pay capital gains taxes, depending on when you purchased it and the original cost). Then pay down the loan at 6.74% — leave the 2.95% loan — and put the rest of the money in the bank for emergencies.
It’s sort of a compromise between the two alternatives, and I think it’s the best idea.
