Downsizing your home can be a smart way to simplify your life while saving time and money. But before you put your current home on the market and start looking for a smaller house or condo, here are a few questions you should consider:
What are your reasons for downsizing?
There are plenty of good reasons to downsize. A smaller home may be easier to maintain, helping you free up valuable time for traveling or hobbies. Moving to a smaller place could also help you trim expenses. Typically, a larger house is more expensive than a smaller one. In addition to the mortgage payment, property taxes and insurance are likely higher with a bigger home. Downsizing may also help you save on utility bills, maintenance costs and out-of-pocket repair costs.
How much will it cost to move?
While relocating to a smaller home can save you money in the long run, you'll want to consider the potential hidden costs of downsizing before making the move. For example, your current home might require renovations or repairs to get it market-ready. You might also need to purchase new furniture or appliances or pay to store the big items that won't fit in your smaller space. Additionally, if you're downsizing into a condo or a property with a homeowners association (HOA), you'll also need to factor in additional costs, such as pet fees or HOA fees.
Can you achieve more financial freedom by downsizing?
Depending on how much money you save by downsizing, it could allow you to live a much more financially flexible lifestyle. For example, imagine if you sell your current house, find a cozy little nest you really love, and it results in hundreds of dollars saved each month on mortgage payments and other associated home ownership costs. What could you do with this extra cash to get where you want to go even faster?
- Reduce debt – With more money in your pocket every month, you can pay down your credit card and other debts faster. Concentrating on paying down your debt can save you hundreds or even thousands of dollars in interest charges over the life of a loan.
- Grow your retirement nest egg – The money you save each month from downsizing could be just what you need to give your retirement fund an extra boost.
- Pay off your mortgage – With the equity from the sale of your current home, you may be able to pay cash for a smaller home. Living mortgage-free can reduce financial stress and help you reach your goals faster.
If you're looking to simplify your living space and potentially save money, downsizing might be the right solution for you! When you're ready to downsize, Wright-Patt Credit Union is here to help. Meet with one of our knowledgeable Mortgage Loan Originators or check out our mortgage resources for more helpful tips and tools.