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We Sold our House to Pay off Debt. Here’s Why!

We Sold our House to Pay off Debt. Here’s Why!

UPDATE October 4, 2022: After four-and-a-half years of renting and one wild housing market, we are homeowners again. Selling our house to pay off our debt, and then renting while we saved for a new home, was absolutely the right decision for us. It took a little longer than we expected, and the pandemic turned the housing market upside down, but it was definitely the right choice. I’m writing this from a *very* messy, half-unpacked house, surrounded by boxes and half-filled trash bags, and I have never been more grateful for my house. <3 OK, now on to the original post! 


We did it. We paid off all our debt. After years of watching our debt creep up and then slowly back down again (rinse, wash, repeat), we finally nipped it in the bud completely. In one fell swoop, we went from indebted to creditors to financial freedom. And you know what? 

It feels amazing.

We Sold Our House to Pay off Debt

But although we were going about it the traditional way (with a strict budget and the use of cash envelopes), we ultimately chose an outside-the-box method for paying everything off.

We sold our house to pay off all our debt.

Does that idea scare you a bit? It scared us! It took us nearly a year to make the decision to act on an idea that was first sparked when we realized we had enough equity in our home to give ourselves a fresh start and then some.

We didn’t make this decision overnight. We hemmed and hawed and stewed over it for months. But ultimately, it felt right for us – and several months later, we have no regrets and would do it again. 

I thought I’d share this post in a sort of FAQ format, since we do get lots of questions about our choice to sell, pay off debt, and become renters. If you have questions, please feel free to leave them in the comments below!

How did the idea to sell your house to pay off debt come about?

We have been budgeting for years. You can join my 60 Day Budgeting Challenge here to learn exactly the process we use (it’s free!). Athough we were paying things down, it was slow going. Especially considering we run a small business and are responsible for our own paychecks each month. The planner business is very seasonal and spring and summer are very tight financially. Even when we had a “good” month, we felt restricted by debt (imagine how free you would feel if you could wipe away a car payment!). 

When friends in our neighborhood started selling their homes, we took a look at what our home was worth. We’d been in it for almost seven years and the value had gone up quite a bit. We realized that we could sell it, pay off all our debt, and fund an emergency fund. In addition to that, all of the money we spent each month on debt would be freed up to go into savings for a more robust emergency fund and then, savings for a down payment on our future “forever” home.

Emergency Fund

But even then, it wasn’t easy. I was scared to sell and go from homeowner to renter. We liked the idea of owning our home. It made us feel in control, and if we stayed in our home, the value would hopefully only increase. So we went back and forth for months.

Finally, we decided that financial freedom was worth giving up some of the independence of home ownership (and as it turns out, renting makes us feel freer than ever!).

Why didn’t you just stay in the house, keep paying off debt, and then sell it and use that as a down payment when you were ready to move?

This was a constant question we asked ourselves. Would it be better to just stay put, pay off our debt, and then sell and use that money for a down payment on the next home?


Maybe. It certainly would be what we were doing today if our home value hadn’t increased so much, or if we felt especially tied to that home. 

But we were ready to just cut off the debt completely. The housing market here is hot, and we felt fortunate that we could sell quickly and give ourselves a clean slate.

Was it hard to go from being a homeowner to a renter?

No, no, and no again. 

For one thing, our neighbors and close friends – who lived next door to us – were moving and planned on renting out their house. So we snagged it! We literally moved next door, into a very similar home. 


That was incredibly convenient, but not a deciding factor. There are lots of homes available for rent in our community, so we knew we could find a place and stay in our neighborhood – the kids didn’t have to change schools, and the disruption to our lives was minimal (except the part where I have to explain to everyone that we moved next door…ha). 

For us, renting is freeing. We’re not paying HOA fees. If we get stuck in another hail storm, we don’t have to deal with the insurance company to repair the roof. When we’re ready to move, we don’t have to go through the process of selling a house. After years of home ownership, hail storms, foundation issues…renting feels easy and I am ready to stay a renter until we find the home we want to call our own until we retire.

I didn’t feel burdened by our home…but I feel freer without it. If that even makes sense?

Would you recommend selling your house and paying off your debt to everyone?

I would not recommend this to anyone, but I also wouldn’t not recommend it. This was a very personal decision based on our experiences, our finances, and our goals. 

One thing we talked about – a lot – was how we’d feel if we sold the house, paid everything off, and then found ourselves back in debt again…and renting, with no equity to fall back on. 

Dolla Bills

We decided that our financial habits have changed permanently. We’ve proven to ourselves over the years that we know how to budget and we know how to maintain it. Ten years ago, I don’t think this would have been the right choice for us. I kind of feel like the stars aligned in order for this to happen.

I have had a couple of people tell me they’ve done the same thing, though – so I know this isn’t a new idea, and I know we’re not alone!

When will you buy a new home?

Our original plan was to build up our emergency fund and save for 1-2 years until we have enough for a down payment on our next home. But honestly, though? This debt-free life is for me. We might wait a little longer until we can pay cash for a home, or at least make a very large down payment. Or maybe something will hit (like planner sales will take off…ya never know!) and we’ll be able to do it sooner. 

Right now, we are open to anything timing-wise, but know for certain we won’t be making a move until we are 100% ready. No rush!

Piggy Bank

Here’s what I do recommend, no matter what your situation, if getting out of debt is your goal:

  • Be creative – think outside the box when it comes to bringing in new income to pay off that debt.
  • Be consistent – if you are consistent with your budget and paying off your debt each month, you’re going to see progress.
  • Think long-term – although we had one car payment, I am super grateful we chose not to replace our hail-damaged car with a new one. Instead, we chose to keep it and drive it until we can afford a new car. It’s so easy to get wrapped up in “new car smell” (or wanting a bigger home, or splurging on a vacation, etc.). If you can think a little further out than how you’ll feel driving off the lot with that new car, I think you’ll find yourself making choices that will cost you less!

Today I am enjoying our debt-free life. We still have a budget – a super strict one, actually. We don’t want to mess up what we’ve created, and it’s super important to us to save right now. With one exception – we moved my horse to a local boarding barn – our lifestyle is exactly the same as it was before, if not even a little tighter. Because ain’t no way we’re going back into debt, y’all.

Coin Purse

And that is our debt-free story. I was reluctant to share it because it’s so specific to our situation, it’s not really something everyone can replicate. But maybe it will get some ideas flowing or spark something that will help you out if you’re aiming to be debt-free, too.

Questions? Let me know in the comments below. I’d also love to have you join me in my 60 Day Budgeting Challenge – you can learn the exact system we use, and I have a super supportive Facebook group you can join to go along with it!



Copyright: feverpitched / 123RF Stock Photo


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Congratulations, Carrie. We, too, lived in Dallas and were ready to retire. We sold our home to buy a smaller one and pay cash for it. You are right . . . not having a house payment, property taxes, etc., to plan for is great. We have purchased a smaller home out of Dallas, and the property taxes will not be near as high. And we are loving debt-free retirement. Debt-free is wonderful at all ages . . .

Did you have to pay taxes on the proceeds from selling a house?

I like this idea. I think that the best idea is the idea that works for you. Each of us have our own specific situation. Budgeting is a great thing to have mastered. Thank you for sharing this post at Nifty Thrifty Sunday.

Congratulations on becoming debt free! We are actually in the process of selling our house to pay off debt and everyone thinks we are nuts to become renters. We live in Northern Virginia, in the DC metro area and everything is so expensive! We are looking forward to having more options and feeling free from the debt burden. Thank you so much for writing about your experience! 🙂

My husband and I are planning on selling our house to pay off all our DEBTS and use the proceeds to move to a different area of the country where he can earn more money and I can hopefully stay at home for a while with my daughter. I am on the fence about buying another house or just rent for a few years while I put the money in an investment account. Based on my plan we could walk away with a giant emergency fund. I feel like it would be enough cushion for us even if work slowed down for him in his trade. We have one child and she is still a baby. I want to be there for her as much as possible and feel this is an opportunity I can’t and should not pass up. I currently work and actually make a very good salary. Where we are currently we can literally pay all the bills with my check and live and save with his check. Should we do it??? What would you do?? What do you think??

This is what we are doing. We are about to close on our house and with our profit we are paying off my huge student loan debt. We are downsizing and renting my grandmothers upstairs for 2 years. She lives in the school district we want to end up in, getting out of our starter home, and our only debt will be one car. And we will have the ability to save save save for our forever home. Our two kids are 1 & 3, the space we are moving in to is quite small but the thought of having NO student loan debt is beyond amazing! 🙂

Thank you for sharing your story. My husband just proposed this idea to me, as we talked about ways to pay off our large debt and pave the way for a better future for ourselves and our toddler children. I can NOT get the idea out of my mind! I’m obsessed, but both of our families are very against the idea! I have been combing the internet so that I can find stories of others who relate. Do you have any more resources you would recommend? Books, movies, etc?

Thank you!!! I live in the Dallas area too, but I am single with a ton of student loan debt and credit card debt. I have thought about selling my home to pay off the debt , and live wuth my brother and his family for about 1-2 years to save even more! Im just scared because it is just me…

WOW! Thank you for sharing this. We have some credit card debt from helping some family members out and we’re just done! We live in a beautiful house, but know this neighborhood is not ultimately where we want to be. We’re under contract on our home and plan to rent. It will wipe out all our credit card debt so all we’ll have is our cars. I cant wait to be able to put any extra money away into our savings account.

I’ve honestly been going back and forth on the whole moving thing because the house is great, the lot is not, but my kids have friends to play with and I don’t want to uproot them from their school (we’re trying to find a rental in their school district). Us staying here is “easy,” but reading how freeing it is for your family sounds amazing. I want to have more experiences with my kids, not have to run the “rat race” so to speak to live in a pretty house. We plan to rent for a year and then look for our forever house. Seriously thank you for this, I’ve been freaking out a little bit the last few days!

thanks for sharing.
debt can be so stressful. we intend to sell ours and restart afresh with the view to not going back the same path anymore.
its scary in the first place especially if that is the only home you have. But i am sure its worth it comparing to having freedom and peace.

Hi Carrie,
First of all, thank you for posting your story. My husband and I have been discussing the sale of our home to pay off debt for a couple of months now, and it’s difficult to find information specifically on this topic. Yes, we could stay in our home and eventually pay off the debt we have accumulated during my time in grad school but it honestly feels like a noose around my neck when I think of how long it would take to pay off! We’re 75,000 in debt- that’s CC plus student loan debt, and we could potentially get 80,000 from the sale of our home- after paying closing costs, and realtor fees. But the truth is, we have great income now that I’m in a new position. And I think we could build up an emergency fund and a down payment on a new home in less time than it would take to pay off the debt. I know this is a personal decision but, what do you think?

Thanks for being awesome!

Thank you for this! I have been kicking this idea around myself for a couple years now and feel like it NEEDS to be done. But it is so scary! I am a single mother and bought my condo foreclosed about 6 years ago at a steal of a rate (when money wasn’t so tight). It will be hard to leave, but I definitely don’t see it as my “forever home”. At this point, given the market value, I would stand to profit at least $20-30,000+ AFTER paying off every last cent of my debt. Talk about a huge weight off my shoulders! Just the thought of being debt free (and having a cushion!) is so freeing. No more stressing, wondering when or how I will ever pay off my debt. No more “working my side gig” to put just a little extra money in my account. No more feeling like I HAVE to stay at a job I don’t like just because I “don’t have any other choice”. Don’t mind me… just giving myself a prep talk (because I suck at making decisions and tend to second guess myself, lol).

Rent rates are high in my area.

Would you do the same if your mortgage is $500 and you will pay $1,000 rent for a similar house ?

We have talked about selling pretty much about a year after we bought our home. We over bought and the mortgage is 38% of our take home pay. We were almost debt free when we bought our home but now 5 yrs later we are over $30,000 in debt. We are now seriously talking about selling to pay debt off. We have about $50,000 in equity maybe a little more depending on what it has gone up to now. The problem is that rentals are way more expensive than buying around here. We might be able to shave off about $400 per month in housing expenses if we found a cheaper rental. It would be a lot smaller for sure. We have 3 kids and 2 are teens. So the 2 teens want their own room but we probably will not be able to find a 4 bedroom for what we need to. We also have a dog and a cat so renting may be tricky. We have 3 strays we have taken in as well. Becoming debt free sounds so good though. I would really miss our home but it might be worth it. Realtor fees may knock out a lot of our profit though and not sure what repairs would cost after inspection. I hate moving and the selling process but could be worth it. Just not sure. We are on the fence. What would you say? I will add we are selling a truck that could knock out a good chunk of it but not all. I then worry because our mortgage is 38% of our take home that we would find ourselves in this mess again. Thoughts?

Oh my goodness thank you for sharing! Every last one of your concerns are my concerns. I’ve been a home owner for 22 years . I’m panicking about becoming a renter. However, as a teacher, it would take me forever to pay off my debt! I’m also nearing retirement so I need to make some decisions. Thank you!

I am so glad I found this article and read all the comments. My husband and I have our home on the market as we speak and want to use the equity to pay off our credit card debts. We drove around a beautiful neighborhood being built and got so distracted by the bells and whistles of the model that we put an offer on a future home to be built. If we move forward with the new home AND pay off our CC debt, then our down payment for the new home would be much lower, which means that our mortgage would be a lot higher. Now I am having second thoughts on buying a brand new home and just using the additional down payment money to pay off the CC, possibly other debts (car note and Student loan), and just rent or move in a town home.

I am at a crossroad…and being close to debt free would be amazing!! We have a son that’s 5 starting school this year. We also want to start his school year off right without moving him around from school to school.

I’m so glad that I came across this article – and thank you for sharing your story. I live in Canada and am contemplating selling my hone to pay off my unsecured debt – credit cards, lines of credit. I am a single mother of two children who are in university. I have lived in my home (my first home purchase) for 10 years. now. While the mortgage is affordable and I love the character of my century farmhouse on 2 acres, the reality is that I have next to no disposable income for saving. My debt payments eat up so much of my income that even if I stayed in the home and continued paying down my debt and the mortgage, I would have no money to put into the maintenance and upgrade of the home. After living in it for 10 years, things are beginning to need repair – roof, siding, etc. Plus, with 2 kids in university, I need to save money to put towards their tuition (the kids contribute as well, but their father and I want to help pay for their education). I have lived like this for 10 years now. I can’t even imagine how wonderful it would be debt free, but you make it sound amazing. Like many others who have commented, I am hesitant and scared to go from being a homeowner to a renter, but maybe that makes the most sense for the short-term until I can save enough to buy my forever home. Thank you again. Reading about others who are in a similar situation and who have made the decision to sell to pay off debts, makes me feel less crazy for considering this option.

Hey! This will help me. We sold our house two years ago to paid off our debt and now are renters. It comes with it’s challenges but reading your blog help me feel that we are not the only ones that sold our house to be renters. I must say my husband and I are better financially but it can be a little crazy to keep a budget. As a couple seeing eye to eye with our finances will get better in time.
Thanks a lot for sharing!

I have been looking and looking for people that are doing the same as we are. We are putting our house on the market soon to pay off our debt and “upgrade” to our forever home. Our equity will be $110,000 plus. (We got our current house wayyyyy lower than asking price and my in-laws put a big down payment down for our wedding gift). We have about $50,000 in debt, maybe a little less. My issue and what makes me nervous is will paying off all that debt at once lower our scores so we won’t get prequalified? We are open to renting for a few months while we look for the perfect forever home.
I guess I’m nervous about prequalifying after paying off all of our debt at once. We can’t properly prequalify beforehand with all that debt. So stressful!

This is one of 2 ways to properly pay off debt in my opinion. Lump sum debt payments. It floors me to see Dave Ramsey and other supposed financial experts telling people that are barely surviving to sell their cars and get peices of junk and live like literal peasants for years to nickel and dime the debt down. That is the opposite of how to pay off debt.

There is 2 ways to do it.

The first is sell your home and get rid of it.
The second is to exponentially increase your income.

That’s it. Trying to “snowball” your payments doesn’t work for most people.

Last edited 3 years ago by Joe

Thank you so much for the inspiring article.
I have been thinking about selling my home to pay of my debt for over a year now.. My husband passed away when the kids were small, and we have stayed in the house nearly 17 years! The house is aging, and consistently required me to dip into saving to be a fix-er upper.. I feel that I may not be able to keep up with repairs in the future. Nor do I wish to consider throwing all of my savings into doing so! Nearly everyone I have mentioned this to thinks I’ve completely lost it. So good to find a community of like minded individuals. While I know this may not work for everyone, I cannot wait to have the burden of debt off of my shoulders.

Hi Carrie,

I am so happy I came across you article. My husband and I are at the point that we need and want to sell our house to get out of debt, rent, change our line of work and do some investing. We have a detailed plan in place, but we have lived in our house for 15years and what we have been doing, has not been working for us. With our CCard debts and others it’s always 1 step forward and then 10 steps back. I am so hesitate about it all. I thinks more emotionally, it’s our home, I have two kids 4yrs and 7yrs. Its where they have grown up.
Also, I feel like our parents are not going to approve of our decision. They believe that having a house and equity is important. Yet we know we will be better off renting, doing some investing and eventually buying our forever home. My husband and I were only together for 3 months and then bought our house and have never rented.

I know its a huge change and scary but I feel it would be fantastic, yet like I said before, hesitate.

What would you do? How did you feel emotionally when you did it? Did you feel like anyone was judging or not approving your decision?

Please get back to me. Thank you. Amanda Yong

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