On the edge: Should I sell my house?

We are financially living on the edge. We have no savings, are in debt, and have no hope for real progress. Should we sell our house now? We live in a relatively strong market north of Boston and we are considering a move to something smaller in the ex-urbs. This would gain us a financial safety net that we don't have now. Our concern is that if we wait too much longer, this plan might not even be an option.

It is hard to answer this question without at least a little bit more information, but it seems like you are thinking along the right lines. If you can sell your current home and recognize enough of a gain to eliminate the debt and establish a reserve fund, that could be a very smart move.

At the very least, you should meet with a realtor and confirm a realistic selling price for your current home. You should also do some house shopping in the areas you are considering moving to so you can be sure that you can get a reasonable place for the amount you are hoping to spend.

Finally, you should also meet with a mortgage broker and get pre-approved for a mortgage. If you are as much on the edge as you think you are, there is a strong possibility that your credit score may prevent you from getting a good rate on your next mortgage. So, you need to go through the entire mortgage qualification process and be certain that you know where you stand.

Once you do all these things, you will have all the information you need to make an informed decision and if things go according to plan, you could find yourself with some financial breathing room which could be a huge weight off your mind. Good luck.