You should start by determining if owning this rental property is in your long-term life plan (without considering the credit card debt). Below are my comments on some of the issues to consider including the true rate of return of the property, transaction costs associated with the sale, and how the rental property may impact your lifestyle and career goals.
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Generally speaking, putting the money toward paying off high-interest credit card debt is going to help you the most, then keeping an emergency fund, and finally contributing to retirement plans. There are also traps to be wary of with 0% credit cards. It would help to build a complete financial plan considering your entire financial picture including. . . .
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While the credit card company charging 16% interest is annoying, taking money from your 403(b) or any other retirement account to get rid of the debt may negatively impact you financially. Even though you can take the money out without the 10% penalty, you would still have to pay taxes on the money. You would likely lose money on the deal based on how the math works.
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My answer: neither is the optimal strategy – but that the home loan is a less-bad strategy. Your financial planner is correct about it being worse to use your IRA money to pay the loans. When you take money out of the IRA you will have to pay the 10% penalty plus income taxes, which should be 22% based on your income. This means to pay off the $50,000 debt you would need to take out . . . .
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No, your financial adviser will only have access to information approved and provided by you and your husband. This information may come out if you and your husband were to submit your credit reports to the adviser for. . . .
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Other than the credit card debt, your other debt and your housing costs actually look quite good. If you can get the credit card debt paid off, you'll be doing very well financially. Your best bet is to make minimum payments on your student loans and your car loan and put everything you can . . . .
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When credit cards carry a (any) balance they charge interest on the entire amount, even purchases, on a daily basis. So there is a difference, because the client in scenario B would accrue interest daily on the purchases they made that month, while in scenario A they are only accruing interest . . . .
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