Is It Time to Downsize?
Did you make your New Year’s resolutions? Again? Are you still holding your own or did you fall off the wagon just after a few days? New Year’s resolutions are a time-honored tradition that allows those to start fresh and begin anew by throwing away old habits and trying to establish newer, better ones.
The most popular of resolutions have to do with losing weight or eating better or making more sound financial decisions. And speaking of financial decisions, many homeowners are wondering if it’s time to downsize, to trade in the older, larger home for a smaller, less expensive property in which to retire.
If you’re thinking of downsizing now or in the near future, here are some things you should consider.
Retiring soon? One way to spend less and let your retirement savings help out with monthly expenses is to live in a smaller place. A smaller and less expensive property will not only save on any mortgage payment you might choose to have but your property taxes and insurance will drop as well.
Empty spaces? If you’re now an empty nester and the last of your four children have moved out, either to college or starting their own careers, suddenly those rooms are strangely empty. You rarely go to these once occupied bedrooms and when you do it’s probably to just clean up a little bit. Fewer rooms mean less maintenance and expense.
Pocket the difference? By downsizing you’re essentially trading a larger home for a smaller, less expensive one. If your current home is worth $550,000 and you have a mortgage balance of say $100,000, by downsizing to a home selling for $300,000, not only will you no longer have a mortgage payment but you’ll pocket an extra $150,000 to add to your retirement fund.
Moving closer? As children grow and leave the family nest, it’s not a given they’ll choose to live in the same city where they grew up. In fact, they must go where their new jobs take them. However, you do have the flexibility when you retire because you can live pretty much anywhere you want. By downsizing, you can choose to live closer to family while reducing your monthly living expenses at the same time.