As you get older, you may realize your home is larger than you need. Maybe your kids are grown and live on their own. Maybe your life has changed in other ways and you’re ready to take that next step. Whatever the reasons, consider these ideas when you are thinking about downsizing!
What are the advantages of downsizing your home?
- Saving money. You’ll have more cash if you’re spending less on monthly mortgage payments, taxes, insurance, utility bills, maintenance, and repairs. That cash could go towards things like retirement or paying down debt. If you’ve been in your house a long time and have a lot of equity, you may even be able to buy a smaller home for cash.
- More time. Larger homes take more time to clean and maintain. With a smaller home, you’ll be able to spend more time doing things you enjoy.
- Less stress. Let’s face it, a large home can come with more headaches and demands. Especially if you have a large property to maintain.
What are the disadvantages of downsizing your home?
- The need to get rid of belongings. Furniture, rugs, clothing, toys, and stored items in your basement or attic will likely need to be sold, donated, given away, or thrown out because you’ll have no room to keep them. It can be tough deciding what you have room to keep in a smaller place.
- Less room to socialize. If you like to host guests at your home, it may be harder with a smaller home. Cramped dining rooms or no guest bedroom makes having a party or gathering tougher. This could also affect your time with grandchildren if you want to babysit and have them sleep over.
- Too much time with loved ones. While it may be good to get closer to your loved ones, if you’re used to having a room to yourself or your own TV to watch what you want, then downsizing could be an adjustment.
- The expenses of buying, selling and moving. The thought of packing up years of living, finding a new home and selling your old home can seem daunting. Plus it’s expensive. Moving costs, closing fees, new furniture, repairs, and remodeling can add up.
Which downsized home is right for you?
Deciding which kind of home is the right choice for you is also important. Think about these questions when you are downsizing:
- What type of property do you want? You might want a smaller single family home or you might want to buy a condo or townhouse where someone else manages the maintenance and landscaping.
- How long do you plan to live in the home? If you are downsizing to a home where you plan to live as you age, then consider a home without stairs and bathrooms with large walk-in showers.
- How much time will you spend in the home? If you plan to travel or spend the colder months in a warmer place, a smaller home might fit your needs and your budget.
- Where do you want to live? Do you want to stay in your current community, move closer to family, or move to a place you’ve always wanted to live?
- How much home can you afford? This is maybe the most important question of all! Selling and buying a home both have costs. This will affect how much money you get from selling your old home and how much money you’ll have to buy your new one.
When is the right time to downsize your home?
Deciding when to sell your current home and buy your next home can be tricky. When you are selling a home, a seller’s market can help you get the most cash. But a seller’s market also means that buying your next home might be more expensive – especially when you are trying to buy a new home in the community where you live now.
Also consider the number of homes for sale where you want to buy. In many communities across the United States, smaller and more affordable homes are in short supply. This can affect your downsizing plans! Consider selling your home first and moving into an apartment for a year or two while you explore your options. This can give you time to find the right home in the right community for you.
*Freedom Mortgage Corporation is not a financial advisor. The ideas outlined above are for informational purposes only, are not intended as investment or financial advice, and should not be construed as such.