Traditionally we think of the homeowner path as upsizing. The young couple buys a small starter home until the family grows (they’ve presumably seen an increase in salaries and financial stability) and they move into a larger home. But there are times in your life when smaller spaces might make more sense.
Here are some signs you may want to downsize.
This is one of the most common reasons people look into downsizing. As they move toward or through retirement, many people hoping to stretch out their retirement savings want to decrease their yearly expenses. A smaller and cheaper property can help do that by reducing property taxes, insurance and mortgage payments.
2. Feeling Overwhelmed
Another sign you may want to downsize is if you are feeling overwhelmed, no matter your age or stage of life. This can be from the physical work of caring for a large property or from worrying over home finances. Between time spent cleaning and maintaining the home to money spent paying others to help you clean or maintain it, a home can be a lot of work — and a bigger home can be even more work.
3. Unused Rooms
Bigger is not always better. Walking by rooms in your home that do nothing but collect dust is a sign you should consider downsizing. Unused rooms cost money in property taxes, maintenance and utility bills. Moving to a smaller home can mean you consume less energy, use less space and spend less money.
4. The Kids Are Gone
A family home is full of memories and childhood knickknacks that take up space and energy. If your adult children have moved out, it may be time to sift through the memorabilia and downsize your property. This might also allow you to move closer to your children and grandchildren if they have moved to another part of the country or world.
5. You Can Make Big Money
When you purchase a home, you usually calculate potential appreciation. If that appreciation has happened, it may be time to cash in, especially if any of the other factors also apply to your situation.
Downsizing to a smaller home or rented property can provide more financial freedom. Life can also be easier and more comfortable with a more manageable home and fewer possessions. Downsizing can offer the financial and social freedom to travel more, pick up a new craft, or spend time with family and friends — whatever matches your goals.
When you start the search for your next home, keep in mind that a new mortgage means you may need to get your credit in shape. If you don’t know where your credit currently stands, you can check two of your scores for free every month on Credit.com.
More on Mortgages and Homebuying:
- Why You Should Check Your Credit Before Buying a Home
- How to Get a Loan Fully Approved
- How to Search for Your Next Home