Watching your friends purchase bigger and bigger homes each year can make you jump onboard the “bigger is better” train. But is bigger better? Here are the top three reasons why downsizing your home may be the way to go.
Purchasing a house is an exciting time. You go in to see how much home you can afford and your lender proudly gives you a number that could require payments as much as 50% of your monthly income. Since the American Dream puts the idea into people’s head that the bigger the home, the better—a mortgage payment that takes up the bulk of your monthly expenses is expected rather than shuddered at. Do you really need that much house, though? After taking look at the numbers, your answer may change from a soft yes to a hard no.
Let’s say you make $89,000 a year, or close to $5,600 a year after taxes. That’s pretty great money, and you’re doing pretty well for yourself, so let’s say you decide to buy a house. You visit your mortgage broker and he figures out your debt-to-income ratio and approves you for a house worth $600,000. That can buy quite a house, depending on where you live, but the monthly payment is going to be $3,225. That means you only have $2,375 for food, insurance, and other monthly expenses, not to mention savings.
Now let’s say you own that home but decided to downsize. You go from a $600,000 paying $3,225 every month to purchasing a $240,000 home, paying about $1,400 every month. Already, downsizing will save you $300,000 plus interest.
Beyond the purchase price of the home, you could also save money in maintenance. Suddenly, there is less roof to repair, less yard to keep up, and less cleaning products to use. The electricity and gas bill might also decrease as there are fewer rooms to heat and cool.
There is one caveat to consider when downsizing, however. Much of the time, downsizing is the more fiscally sound choice. There are a few situations where it isn’t though. It’s a good idea to check into any and all HOA fees and property taxes before purchasing any home, just to make sure you won’t be paying a lot more than you initially thought. If you are unsure of what fees may be attached to your new property, check with your real estate agent before you buy.
Enjoy More Space
It seems counterintuitive to purchase a smaller home to get more space. Humans tend to fill the amount of space we have available to us, and occasionally even need to add more space! By forcing ourselves to eliminate some of our stuff to downsize, many find themselves with more space than they thought possible. For example, moving into a smaller home forces you to eliminate bulky furniture and use only pieces that can be used for multiple things, such as a futon. By thinking about your space relatively, your ottoman can become storage for your extra blankets and your side table storage for your shoes.
The process of eliminating our possessions can be stressful and is surely a daunting task. It can also be a great time of lightening your load, reprioritizing your efforts, and a great time to make money. As you decide which things to keep and which to give away, you may consider selling a lot of your unused and unwanted items. There are many online sites that help connect your surplus with someone who has been looking for such items. If that doesn’t work for you, you could also host a yard sale or donate the items you are no longer holding on to.
As you downsize your home, you’ll be amazed at the lightness you feel and the roominess of your house. Try it out and see!
Do you ever feel like you spend all day cleaning and there’s always more to do? Stop this never-ending cycle of work and spend that time enjoying the space instead of downsizing. When you downsize, you may find it takes only half an hour a day to clean your entire home and you have more time to tackle that project you’ve been meaning to get to.
By downsizing, you can also find a location that better serves your needs. Instead of commuting to work for two hours every day, you can now live a few blocks away and bike to it. You can live within walking distance of your grocery store or your kids’ school, too! Saving you time on rushed mornings and grabbing those last-minute items for dinner.
Downsizing to a smaller home isn’t practical for everyone. If you’re looking to save money on your monthly payments, have more space, and save time, however, downsizing may be the perfect option for you.
Need some guidance on finding the smaller space that fits your needs? Look no further than your local Clever agent. With flat-rate fees, local expertise, and top ratings—it’s no wonder they’re called Clever. Call us today at 1-833-2-CLEVER or fill out our online form to get started.