Bigger is not always better – especially in retirement.
When children move into their own homes, when keeping up the landscaping goes from a source of pride to a source of back pain, it may be time to consider downsizing your home.
Earlier this year, Dave Ramsey, the financial guru, highlighted the advantages of selling your current house and downsizing into a smaller home that better serves your current needs. Ramsey explains three potential financial advantages to downsizing:
1. A smaller home means less space, but it also means less time, stress and money spent on upkeep.
2. Let’s assume you save $500 a month on your mortgage payment. In 30 years, you could have an additional $1–1.6 million in the bank to get you through your golden years.
3. Use the proceeds from selling your current home to pay cash for a smaller one. Just imagine what you could do with no mortgage holding you down! If you can’t pay cash, aim for a 15-year fixed rate mortgage and put at least 10–20% down on your new home. Apply the $500 you saved from downsizing to your new monthly payment. At 3% interest, you could pay off a $200,000 mortgage in less than 10.5 years, saving almost $16,000 in the process.
Selling a house is a big financial decision, but it’s also a lifestyle decision.
Downsize and Travel
If your retirement plans include seeing the country and the world, maintaining a home that isn’t used is a waste of money. A lower mortgage, and lower maintenance costs means more money for more bucket list destinations.
Downsize and Socialize
Smaller homes in retirement communities or neighborhoods with a number of people at the same stage of life means that there are more people around you to interact with. Being in a community with people that share your interests and experiences will fill up your social calendar.
Downsize and be a “Snow Bird”
Selling a home that was built for a full-size family might mean being able to buy two smaller homes in different locations. Head south to avoid too much snow in the winter and head north to escape the summer heat. A cottage by the beach and a cozy and luxurious cabin in the woods might be your ideal way to avoid harsh weather and keep the scenery fresh.
Let Us Get You to the Next Step
MarketPro Homebuyers can help with your downsizing process. Our team of experts will make a fair cash offer for your house and make the process fast and painless.
In some situations, we can even help with packing, moving, and other expenses. If you or someone you know if looking to make new arrangements for the next phase in your life, please contact us today!