The Top Reasons To Downsize When You Retire

August 12, 2022 by

The Top Reasons To Downsize When You RetireIf you plan on retiring in the near future, you might be thinking about moving. The kids might be grown, and you might not want to take care of such a large house. If that is the case, you should consider downsizing. When you downsize your home, you trade in your larger home for a smaller one. What are some of the top reasons why you should do so?

1. Bulk Up Your Retirement Account

The first reason why you should downsize is that you will free up more resources you can contribute to your retirement accounts. If you have been in your house for a long time, there is a great chance that you have paid off almost the entirety of your mortgage. Furthermore, your home may have even gone up in value by tens of thousands of dollars. Therefore, when you sell your house, you should receive most of the proceeds from the sale. You can use the proceeds from that sale to buy another house with cash and still have money left over to add to your retirement account. 

2. Reduce Your Overhead Expenses

You can also reduce your overhead expenses if you downsize your home. Your home insurance and property taxes should go down if you purchase a smaller house. You will probably have to spend less money on utilities, routine maintenance, repairs, and upkeep if you trade in your larger house for a smaller one.

3. Find The Right Location

If you decide to downsize your house, you will also have more flexibility regarding where to live. It is easier to fit a smaller house in an ideal location than a larger one. If you are willing to purchase a smaller house, you should have more options available to you, and you can find the perfect location for your retirement.

Consider Downsizing In Retirement

If you are getting ready to retire soon, you should consider downsizing. This is a great opportunity for you to free up a bit of extra cash for retirement and find the perfect location for your home. Consider taking a look at some of the houses available in your local area, and don’t forget to reach out to a professional with any questions. 

 

Filed Under: Mortgage Tagged With: , ,

From Big to Small: How to Downsize from a Large House to a Smaller, More Efficient Home

August 25, 2020 by

From Big to Small: How to Downsize from a Large House to a Smaller, More Efficient HomeIf you’re moving from a large home into a smaller house or condo, you’re probably looking forward to enjoying a lower utility bill and not having to do as much cleaning. But before you move, you’ll want to take certain precautions to ensure that you’re not overwhelmed.

A smaller home won’t have as much room for your belongings, which means you may need to get creative. Here’s how you can downsize without losing your mind.

Decide What You’re Going To Keep

Before you do anything else, choose which of your belongings are coming with you. Unless you’ve habitually been getting rid of things you no longer need over the years, chances are you have a large stash of things you’ll never use again. That’s the kind of clutter you’ll need to eliminate before moving into a smaller home.

The obvious exceptions would be anything of significant sentimental or monetary value, but you’ll want to get rid of lots of your everyday objects – for instance, there’s no reason why you need three soup ladles. Having trouble deciding what to throw out? Here’s a simple rule of thumb: If you can’t remember the last time you used it, you probably don’t need it.

Have Anything In Storage? Find A Storage Solution Now

Most homeowners nowadays have the luxury of large storage spaces like basements or attics – but if you’re moving into a condo or a small starter home, storage will be at a premium. And that means anything stored in your basement, garage, or attic will probably need to find a new home. You’ll want to look for a storage solution earlier rather than later.

Perhaps you could rent a storage locker in your neighborhood, or let children or relatives hold onto your belongings until you decide what to do with them.

On Your Moving Day: Move Large Items First, And Put Away Stored Items Before Anything Else

When the day comes for you to move into your new home, you’ll want to try to find the best configuration for the space right away – before your new home is filled with boxes stacked six feet high. Before you do anything else, move your furniture and other large items into the space first, and get them set up so they’re out of the way.

Once all of your boxes are in your new home, put storage items away before anything else – it’ll help you avoid unnecessary stress and sorting later.

Downsizing can be stressful, but with a solid plan and a great real estate agent, you can find a smaller home and move in without issues.

Filed Under: Mortgage Tips Tagged With: , ,

Pros and Cons of Downsizing After Retirement

August 15, 2018 by

Pros and Cons of Downsizing After RetirementWith Baby Boomers already rolling into retirement and Gen X looking forward to shrugging off the stress of the 40-hour work week, downsizing could be a strategic move.

For many Americans, homeownership remains their single largest investment and the monthly mortgage payment their highest bill. Lowering or nixing that cost altogether can free up a considerable amount of cash that could be used for retirement security or leisure activities. Keep in mind, your “golden years” should be just that, so enjoy them.

That being said, there are pros and cons to consider when deciding whether to downsize to a less expensive home.

Size Matters

If you have raised a family and find yourself as an empty-nester, so to speak, you probably have more home than you needed during the days of romping youngsters. Downsizing to a smaller home reduces the amount of maintenance, upkeep and cleaning responsibilities. Relieving yourself of those chores can free up time to relax.

On the con side, a smaller home means less space to for family visits. Although children and grandchildren may not spend months at a time, having the space for holiday stayovers can be important. A smart downsizing plan should consider balancing reduced labor with family time.

Costs Considerations

The surface numbers of downsizing often point to freeing up personal income. A lower or no mortgage payment equals more cash on hand. But selling and buying come with industry and relocation costs.

In all likelihood, your home sale and purchase will come with real estate agent fees, closing and moving costs among others. It’s important to factor all of these expenses into your future projections.

Although home transaction costs are generally static in the real estate industry, relocation can be a bit of a wild card. In-state moves may require only a set fee from a local moving outfit. But if you are headed to warmer or cooler climates, a big move can run upwards of 10 percent of your selling price. Get solid moving prices before tallying up your gains.

Ranked among the top pros to downsizing is the reduction in expenses. Retirement-age folks who have built up significant home equity may find themselves in a position to finally have no more mortgage. In this low-inventory seller’s market, the ability to cash out on high equity gives Baby Boomers and Gen Xers a chance at a zero-mortgage lifestyle.   

Many of our valued elders and 50-somethings are in the downsizing driver’s seat. Contact your trusted mortgage professional to discuss home equity options and other financing programs that can accomodate a retiree’s fixed income.

Filed Under: Real Estate Tagged With: , ,

Is Downsizing The Next Big Trend In Homes?

February 27, 2013 by

Z Glass Micro Dwelling by Tumbleweed Tiny House CompanyThe real estate market has started to recover from the downturn over the last few years in many areas of the country, and more people are thinking about buying a new place to live.

With this new energy in home buying, an interesting trend seems to be developing.  

Instead of going for larger homes, which was an overwhelming trend in years past, many people are choosing micro-dwellings.

What is a micro-dwelling?

There are a number of different styles of micro dwellings being built.  This is a relatively new concept for homes in the United States and individual creativity abounds in this space.

The most common factor in micro-dwellings are their size. They tend to be less than 500 square feet of living space.

Some densely populated metropolitan areas like San Francisco and New York City are planning apartments as small as approximately 300 square feet!

Think this shrinking of real estate space applies only to multi-family dwellings?

Think again. You can also find tiny single-family homes — some of which are even portable.

If you’re still not convinced, read on to discover a few of the factors drawing buyers to smaller living spaces.

A lower price tag – The cost of these homes can be significantly less than that of standard homes, which means you may not have a large mortgage over your head for the next 30 years.

More free time – A smaller house means less cleaning. Who isn’t on board with that idea?

Less clutter – If your home is less than 500 square feet, you have to get rid of everything you don’t absolutely need.

Mobility – Many of these tiny homes are equipped with wheels or built-on trailers, so moving is no longer the stressful and expensive undertaking it used to be. Simply close the door and go!

Smaller is greener – It makes sense that if your home is smaller, you will automatically reduce your energy consumption, which means more money in your pocket every month and a smaller carbon footprint.

Micro-living might not be for everyone.  It does offer an option for those who are just starting out, those who love to travel, or those nearing retirement.

And even if you don’t opt for the smallest living space, reducing energy usage and saving money are ideas most anyone can take to the bank.

Photo Credit: Tumbleweed Tiny Homes

Filed Under: Real Estate Trends Tagged With: , ,