Strategies to get rid of debt, while owning two single family homes.
Hey Folks - I’m new to BP, and looking for some guidance.
Currently I own two SFHs, but have accumulated a good chunk of debt in my adult life. Let’s say in the 40k range, not included the homes.
I'm looking for some guidance on how to rid myself of debt, while still holding onto my first two properties. Both were purchased through VA loan, and have a 5.5 interest rate, 1st home is 135k and second is 265k.
Any help is appreciated!
#1 All Forums Contributor
- Investor
- Northern Virginia
@Christopher Jackson
The way to get rid of debt is to cut expenses and pay it down. Start with paying the highest rate debt first and work your way down from there.
While this is the obvious answer (no hate to you) I was looking for more along the lines of leveraging the houses into capital to pay it off.
#4 All Forums Contributor
- Investor
- Las Vegas, NV
But nobody can help you that way because you did say how much equity you have. If you owe more than 80% of what they’re worth, no, they are already leveraged, they won’t help you. If you owe less than 60% and one of them is your primary, you could look in to a heloc for the 60-80% LTR range. You can take in roommates and they could help you that way.
If the current mortgage rate is lower than your other debt interest rate you could get all new cash out refi mortgages to pay off the other debt and maybe lower your payment as you’re extending the loan.
Otherwise it truly is simple as earning more money (through property rent or actual work) or spending less. Every dollar you pay off is another dollar earning interest for you instead of against you.