Retirement Milestones: Is It the Right Time to Downsize?
If you’ve found yourself sitting in your big, empty house, wondering if you should downsize or not, you’ve come to the right place.Of course, you love your house; your family has created precious memories there, and it’s been the perfect nest to grow and raise your family. But now that the kids are grown up and you’re getting closer to retirement, your house might feel a little lonely – or even overwhelming. While it’s understandable to have an emotional attachment to your home, settling in to a smaller, more manageable home might improve your lifestyle – in more ways than one.
Why Should I Downsize My House?Buying a smaller home is a personal choice – only you know what’s best for you. The key is understanding your options and weighing the pros and cons so you can make a sound decision. If you find yourself on the fence, determine whether the following benefits of a smaller home appeal to you.
Most of the time, a smaller home means a smaller mortgage payment. In retirement, you might be living on less income than you did while working. A smaller home could decrease your mortgage payment and shrink your utility bills, freeing up money in your budget. If you’d like to see the difference a smaller mortgage payment would make in your monthly budget, use our calculator here.
Decrease Your Housing Costs
Lessen the Burden of Home MaintenanceIf you find yourself overwhelmed by the cleaning, yardwork, and general maintenance your current home requires, consider downsizing to a home more manageable for your lifestyle. Apartment complexes and condos typically have on-site maintenance teams, and townhomes generally require less upkeep than a traditional house.
Boost Your Savings with Your Home EquityIf you’ve been in your current home a while, you might be close to paying off your mortgage and it’s likely the value of your home has increased. Selling your home could mean a substantial boost to your savings, giving you more money to travel, resolve debt, find new hobbies, fund retirement, or even pay off your new home early.
Settle into a Neighborhood That Suits Your LifestyleMoving to a neighborhood where residents are similar to you in age can improve your quality of life. If you’re retired, you might want to be around other retiree’s that you can connect with for travel, hobbies, or other social activities. It can be hard to feel neighborly comradery if you’re the oldest resident in the neighborhood or in a neighborhood full of younger families.
Pick a Property Suited for Your Future NeedsIf you’re downsizing later in life, think about the obstacles you might face as you age. Downsizing gives you an opportunity for a fresh start to pick a home with features best suited for your needs. Consider choosing a one-story property so you won’t have to grapple with stairs, or a walk-in shower as opposed to a step-in option.
If buying a smaller home would improve your quality of life, either financially or leisurely, then it may be time to consider downsizing. Downsizing will likely benefit you at some point in your life, but timing and preparation are key. Here are a few things to think about before taking the leap.
When Should I Downsize My Home?
Cost Associated with the MoveMoving can be expensive and time-consuming. You have to pack up all of your belongings in boxes, break down furniture, wrap fragile items carefully, and transport your stuff to a new location. After you move, you must unpack and start over again. The cost of the move will vary based on how much of the work you are willing and able to take on yourself. Even to have a moving company move you locally may end up costing you thousands of dollars.
Choose Your New Home WiselyWhile smaller homes are typically less expensive, this isn’t always the case – especially if your desire is to live in an area notorious for its high cost of living.
Downsizing Your Home Means Downsizing Your BelongingsIt’s no secret that a smaller home means less storage, so you may need to donate or sell some of your material possessions. If you have a lot of sentimental or valuable items, this can be especially challenging. Before you decide to buy a smaller home, decide if you’re willing to part with some of your belongings.
Know Where You’re Going NextYou need a plan before you put your home on the market. Decide where you’re going and when you’ll be able to reasonably get there. Will you rent for a little while or are you going to buy another house? You could consider listing the sale of your home with a contingency, but these are decisions you need to make before selling your house.
If you’re ready to make the most of your retirement and make the move to somewhere new, check out our recommendations for the best places to live. If you think you’re ready to downsize and finances the purchase of a smaller home, call a local mortgage banker today.
About the Author, Michael Owens: Michael Owens serves at the Director of Mortgage Operations for SouthState. With 30 years in the mortgage industry, he has experience across all aspects of mortgage operations ranging from processing, underwriting, closing, post-closing, and training.