As the majority of the country currently experiences a seller’s market, a recent study by Edelman Berland reveals that an estimated 33% of homeowners are considering selling their homes in the near future as they plan to scale down. There are several reasons why this might make sense for many homeowners.
A smaller home implies less space; however, it also means less time, stress and money spent on upkeep.
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. 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.
You’ve built up enough equity in your current home to make a profit.
For most homeowners, this is the case. Of course, this is only true if the homeowner has held on to their properties for long enough to have positive equity that will be sizable enough to put a large down payment on their next home.
Downsizing can offer you a different lifestyle.
For some folks, it’s a matter of living a simpler life focused on family. Some might want to cross off travel destinations on their bucket lists. Some might want a low-maintenance community with high-end upgrades and social events. Decide what you want to achieve from your move first, and you’ll be able to better narrow down your housing options.
If you are currently considering downsizing your home and want to evaluate your options, I am available to guide you and your family on the best housing opportunities available to you now.