An urge to simplify your life may spark a decision to downsize your living situation. The term "downsize" is familiar to empty nesters who decide they have too many rooms after the kids have left home. Downsizing is also a growing trend among homeowners of all ages who wish to simplify their lives and/or apply money they save on housing costs to other financial goals.
There are many reasons for downsizing, both practical and financial. But there are a few reasons it may not result in significant financial gain. Your current home may not sell for as much as you hope, and it may cost more than planned to settle into a smaller house. Over time, though, a lower payment, smaller property tax bill and less upkeep will add up. Below, find out if downsizing will work for you.
Less debt: A smaller home may translate into a smaller mortgage loan, reducing your debt. But be aware that smaller doesn't always mean cheaper. Depending on the housing market in your area, interest rates at the time you sell and other factors.
- Easier maintenance and more time: Smaller yard, fewer rooms, less upkeep. What's not to like about a home being easier to care for?
- Emotional freedom: Do we own our things, or do they own us? Moving to a smaller home usually brings with it a reduction in those "things." Whether or not you move, decluttering can be good for the soul.
- Future Sale: A smaller, more affordable home could appeal to a larger group of buyers, making for an easier sale down the road.