For many homeowners, upgrading to a bigger property is a great accomplishment and a goal to strive for. However, it might not always be the right move depending on your situation and needs. Could it be time to downsize and take advantage of a cheaper, smaller space?
In this article, we’ll dive in and cover the best reasons to downsize. Regardless of where you are in your journey as a homeowner, it could be an ideal option for you.
What is Downsizing?
When it comes to home buying, downsizing is the process of purchasing a smaller home to simplify a lifestyle, reduce space, and cut back on various expenses. In many cases, downsizing is more common among retirees or empty nesters – but it’s still possible at any stage of homeownership.
When downsizing, be sure to assess your priorities and apply them to smaller properties. You’ll want to make sure that the new home meets your needs and has all the necessary features. After all, you’ll be doing the same thing – just in a smaller space.
The best way to decide whether downsizing is right for you is to ask yourself: do I really need this home?
If the answer is no, then it’s time to downsize and take advantage of something smaller.
What are the Best Reasons to Downsize?
1. Get more with less
When people buy larger homes, they often do it to create more space for their family or “keep up” with established social standards. While larger homes do offer more square footage, less can definitely be better.
The more you have in a home, the more you’ll need to maintain. And a bigger home won’t just come with a larger mortgage payment; it’ll also come with the costs of time and money for upkeep, renovations, and much more.
Compare this to a smaller home with all the same amenities but a smaller footprint. By downsizing, you’ll save money on both your mortgage payments and the time spent on general maintenance.
2. Free up cash
A bigger home and a bigger mortgage go hand-in-hand – and unfortunately, many people find themselves house-broke after purchasing a larger property. Typically, a house payment should be no more than 28 percent of your gross income. However, some homeowners have mortgages of as much as 40 percent of their income.
With the majority of your cash going toward the house, there’s little disposable income for other things. This includes saving for emergencies or retirement, paying off credit card debt, or even just enjoying vacations. However, voluntarily downsizing and moving into a smaller, cheaper house can give you the opportunity to live your life to the fullest and enjoy new experiences.
3. Pay off your home faster
Mortgage payments are often the biggest monthly expense for the average homeowner – and over the course of three decades, that can result in a huge hit to your income.
Whether you’re ready to work less or enjoy life more, voluntarily downsizing and buying a smaller home will give you newfound financial freedom. A less expensive home will result in a more affordable mortgage payment. And with a more affordable payment, you could make double payments each month and pay off your new house in 10 or 15 years. Or, you can sell your larger home and use the proceeds as a huge down payment on a smaller home. This creates an extremely low mortgage payment, thus giving you the opportunity to use your money for other things.
4. Improve your health
You might be surprised to learn a connection between better health and downsizing. If you’re overwhelmed with a high mortgage payment, this can raise your stress level and affect your overall health. However, downsizing and moving into a home that’s more affordable can provide a financial cushion and the peace of mind you need.
Downsize Today With Total Mortgage
Remember: downsizing isn’t for everyone. But if a smaller home seems like a good fit for your specific needs and situation, doing so could bring lasting benefits.
Filed Under: mortgage monday