Downsizing refers to giving up your bigger home in favor of a smaller, more compact home. There are many reasons people make this choice. Sometimes empty nesters choose to move to a home that’s easy to maintain, while others want to free up equity from their house. Here are some common reasons people decide to downsize.
Make Life Easier
A bigger home means more responsibilities. From maintaining your yard to undertaking repairs and cleaning the home, there’s plenty of work involved in keeping a home in livable condition. A bigger house is also more expensive to maintain, including higher furnishing costs, higher property taxes, and higher energy costs.
On the contrary, owning a smaller home can be mentally liberating. Without as much cleaning work, you have enough time to do things you’ve always loved.
You Are Retired or Will Retire Soon
Even if you have paid off the mortgage before retirement, downsizing can be a smart move. You could use the extra capital tied to your home to make a better investment in a retirement plan. Moving into a small house also reduces property taxes, home insurance, and maintenance expenses.
You Realize That Less Is More
The average US home is becoming smaller, shrinking by almost 100 sq. feet. The National Association of Home Builders reports that 88% of home builders are currently constructing smaller homes. It’s not only the empty nesters who’re downsizing, either. Some families with young children prefer to live in a smaller house. They are doing so to spend their time and money on memories and experiences.
You Want to Pay Off Debts
If you’re in debt, moving into a smaller home makes sense. It is generally believed that you shouldn’t spend more than 28% of your gross salary on a mortgage payment. Rather than maxing out on a debt-to-income ratio, some prefer to lower their debt percentage.
But without proper planning, you could end up losing more than you own. When selling your current house, consider hidden costs like moving, decluttering, closing costs, and realtor fees. If you’re looking to save on these expenses, contact cash home buyers. We buy houses as-is, for cash, and in less than seven days.