Downsizing Your Home
How To Downsize When Moving?
People struggling to upkeep their homes and the related costs in it consider downsizing to a smaller home. Downsizing your home could be an opportunity to save money and the equity freed up from the sale of your home. It may be though to some to say goodbye to the home they used to live downsizing feels like a weight lifted off your shoulders. Over the course of your lifetime, the amount of square footage you need can change, your budget can increase or decrease, and your preferred location might change. If you start asking yourself “Should I downsize my home“? or you want to know about how to downsize moving, we’re here to help you get all that answered.
In this article, we will talk about the benefits of downsizing and the options you have. If you’re thinking of downsizing it is best to know what steps you should take. Divorce, relocating, or losing a loved one might be the possible reason why you want to downsize but there are several factors you have to consider that will be discussed as we go along.
How to downsize when moving
1. Start early – It is best to reset your mindset and adjust the way you think about your current house and your lifestyle as soon as you decide to downsize your home soon. Start packing and organizing your stuff. Prepare yourself, your availability, and your valuable home for the process of downsizing. If you started early the fast the process is. It didn’t take a week to collect all your possessions, so it is only natural that it will take longer than a week to go through them.
2. Make an inventory of what you have – taking inventory of everything that you have is a crucial pre-packing step. This will give you an idea of how many boxes you will need, whether you need to rent a truck or hire removal service workers. In addition, you would know how much time you would need to give yourself for the packing process.
3. Sort and Declutter – You have to stay organized and focused, and come up with categories to sort everything into. Collate all items and the furniture that you are going to keep, use, donate, or get rid of example clothes, appliances, etc it is optional. Once all packed it would be easy for you to move out. If clutter stresses you out, downsizing can be the perfect solution.
Should I downsize my home?
Downsizing your home means lower upkeep, lower bills, and other costs associated with your home. You can save time both time and money if you choose to downsize. Here are some of the reasons why people choose to downsize;
- Declutter and make money – Eliminate furniture and other stuff that you no longer use. It can make extra cash from sales if you choose to sell it. Only keep necessities and items you use daily. Get rid of outdated items that cannot return a profit or donate items to a nonprofit or pass them along to neighbors, families, or friends. Local charities usually accept clothing, shoes, and other household items that are in good condition.
- Save on upfront and mortgage costs – If you decide to downsize your home or buy a property with less square footage you’ll potentially spend less than you would buying a home with large square footage. You will get to save on both the actual price and on the mortgage-related costs like down payment and closing costs since they are based on the percentage of the sale price.
- Reduce utility expenses – The major savings that come with downsizing your home is the cost of the utility bills. The smaller the home the less money you would need to spend heating them because heat will be much contained in a smaller space.
- Spending less money on home maintenance – Home maintenance I inevitable. You may need to replace the roof, appliance, flooring, and others to maintain your home which is very costly. Downsizing your home makes it easier to reduce regular maintenance and cleaning if needed which reduces cost.
- Preparation for retirement – If you haven’t saved enough cash over the years it may be best to consider downsizing your home. Reaching your retirement goal might require reducing your expenses. The biggest financial benefit of downsizing your home is that it provides you with more capital in investing in marketable business securities for retirement.
- Let you pay off your house or loans faster – You will have the option to accelerate your mortgage and pay it off sooner. It works best if you’re older and want to get rid of a house payment before retirement. If you’re a millennial looking to be mortgage free in the next 15-20 years consider downsizing into a smaller home with a lower mortgage payment. You might need to set aside money to complete repairs on your current house before selling it.
- Use proceeds to buy a new home – If you’re moving into a smaller home with a lower price tag and still paying a mortgage downsizing can help you pay off your previous one. Big homes usually come with big repair bills and monthly payments. You need to know how to downsize when moving for a smooth transition.
What does downsizing mean for my mortgage?
When you sell your home your mortgage will likely change. Downsizing often means that your current is more than your new one will be. If you own your home outright you can sell the old one and then pocket the difference. Calculate your cost basis To determine capital gains on the sale of your home, subtract your cost basis from the selling price.
How can a Real Estate Agent help me when I decide to downsize my home?
If you need to sell your home before you buy a new home you can communicate with a real estate agent for a market appraisal before your start looking for new properties. A real estate agent will estimate a realistic selling price and overview such as marketing and professional fees. They can be helpful in finding suitable properties for you to move to and they can give you tips on which path to take. Their guidance and advice could help you make a smart decision on how to downsize when moving. So if you asked yourself “Should I Downsize My Home”, try asking a professional too.
Pros of downsizing
- Homeowners can save money on mortgage payments, utility bills, property taxes, and other living expenses.
- Homeowner are forced to reduce their belongings and home comes with less maintenance
- Can make money by selling some of your belongings. What’s left can be looked at and most can be shared or donated if it can’t be sold.
- It can make you prepared for your retirement by making you pay debts, loans, insurance and etc. which makes downsizing reasonable.
Cons of downsizing
- Moving can be very expensive especially if you are moving far from your original home or when you’re hiring professional movers
- A smaller home can result in having to rent a room or storage space.
- You will live in a smaller space
- You will be sad living in the home you used to live
5 unexpected Benefits of downsizing your Home
- A spontaneous lifestyle – Many choose to live in a smaller home because it’s easier to manage meaning having a small space is less work and less planning if you decide to travel. In general, Adults who transition to senior living communities can realize the benefits of downsizing.
- Greater financial security – If you pay off your home or you’ve been paying mortgage for years then downsizing can add a significant cushion to your budget which means you have more funds to travel, eat and enjoy life. You can talk to a financial advisor about how the cash infusion from selling your home to downsizing can mean more financial flexibility
- Perfect space for your needs – Downsizing your home gives you the chance to assess your vision for your ideal home. When you move measure the importance of the things that are worth keeping then eliminate the clutter. You will be given the opportunity to decorate your home as exactly as you want.
- Less responsibility – When you cared for your home as you lived there for your entire life it becomes second nature. Moving to a smaller home means having a more manageable space.
- New lifestyle opportunity in the future – packing and cleaning may not be exciting for everyone so it would be best if you focus on what was the challenges you are having downsizing. the actual process of downsizing is stressful, both in terms of the actual to-do list and the emotional impact but will let you start a new life.
- Downsizing your home can increase your cash flow, lower your utility bills, and reduce the time you spend on the maintenance and upkeep of your home
- The downsides to downsizing include having fewer rooms for guests and having to get rid of belongings to fit into a smaller space.
- It’s better to sell your current home before buying a new one, but discuss the possibilities with a professional for specific advice.
- Know how to downsize when moving so you have an idea for your next step for a faster process.
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