Downsizing, typically associated with empty-nesters and pensioners, is fast becoming known as a smart move for a growing number of homeowners in these austere times. Here are five reasons downsizing could be a sensible option for you:
- Paying off or reducing your mortgage
Downsizing your house, when done right, can have a significant effect on mortgage costs. For some, profits from the move will mean they can buy their new home with cash, and no longer have the burden of monthly mortgage repayments. For others, at the very least, it can result in a notable reduction in monthly mortgage repayments, a substantial increase in cash flow and considerable savings in interest over the term of the mortgage.
- Smaller household bills
If household bills are taking up a large percentage of your current outgoings, downsizing to a smaller home with less space to heat, for example, would most likely free up a sizable amount of money each year. Reducing energy consumption is also good for the environment – not to be overlooked!
- Debt and financial obligations
For those of you with debts or significant financial responsibilities on the horizon, such as funding your children’s higher education, downsizing could be a practical option and a sensible precaution to ensure that you don’t find yourself under unnecessary financial pressure.
- Less maintenance & more time
The upkeep of a large home and garden can take up a fair chunk of your free time and money. Downsizing brings an opportunity to free up your time by reducing the labour that is required for regular home maintenance, housework and gardening, leaving you with more time to prioritise the things most important to you; travel, see friends, take up a hobby, experience new things! Life is short!
- Prepare for the future
For new retirees, downsizing has many benefits when it comes to preparing for the future. Though it may feel hasty, preparing for later life by downsizing as early as your sixties can be a sensible move. Downsizing will bring you the opportunity to choose features in your home which would be valuable in later life, such as; accessibility, no stairs, access to good public transport links and being close to family and friends.
Sellers need to be sure that after the typical costs involved with moving are considered, the equity released would be worth their while, and should also consider whether their lifestyle and possessions will fit within a smaller home!