6 Financial Benefits of Downsizing Your Home
Downsizing can be an emotional, yet practical, step after your kids have moved into their own places. You no longer need all of the space in your large family home, so it’s smart to move into something more manageable.
We understand that it’s tough to think about leaving the place where your family has made so many memories, but there can be significant financial benefits to downsizing your home. Focusing on what downsizing can do for your finances can balance out the sentimental feelings you have.
Lower Mortgage Payments
Smaller homes tend to come with smaller price tags, but those who are downsizing are usually able to reduce the cost of their new home a significant amount by using the equity they have in their older home. In some cases, this equity can fully pay off the new home, meaning that you’ll have no mortgage payment at all.
When you’re buying a new home, you also have the ability to make design choices that put the home within the price range you want.
Lower Property Taxes
Property taxes are based on a combination of the size of the home and its location. Smaller homes tend to have lower property taxes. Retirees also don’t need to focus as much on choosing a location that allows for an easy commute to work. Sure, you want to be somewhere where you can easily get to all of the stores you need, but you no longer have to be close to the city. You can choose a home in a quieter area while taking advantage of the lower property tax rates.
Lower Energy Bills
The smaller the home, the easier it is to heat and cool, and this can have a big effect on your energy costs. Those who buy brand-new homes see even more benefits. A new home will be built using the latest energy-saving techniques and materials. It will also feature brand-new energy-saving appliances. You could even talk to the builder about how the proper placement of your home can reduce energy costs by taking advantage of the sun’s rays.
Lower Insurance Costs
Your homeowners insurance may not add a lot to the cost of your home, but it’s still something you have to pay. An older home can be more expensive to insure. It may be harder to get some of the materials used in the build of the home, and the insurance company may increase your cost due to some of the risks associated with an older home, such as older electrical wiring. New homes, though, are typically more affordable to insure. With all of the new materials in the design of the home, the insurance company knows that it’s unlikely that things will go wrong and cause damage. And even if things do go wrong, they’re often covered by the warranty.
Lower Maintenance Costs
A smaller, new home simply won’t have the maintenance costs associated with an older home. You won’t need to worry about replacing the roof, getting new appliances when the old ones break down or making major repairs. These types of issues in older homes can be even more troublesome as you enter the retirement years because you don’t always have the DIY capabilities that you had when you were younger. In a new home, all of the materials are new, so you don’t need to spend money on maintenance and repairs.
Lower Landscaping Costs
You probably spend a fair amount of money on the landscaping of your current home. The costs of grass seed, weed killer, fertilizer, potting soil, mulch, annual flowers, and everything else certainly adds up. These costs also tend to be lower in a new home. Sure, you’ll probably still want to plant some of your favourite flowers each year, but you won’t need as many. You could even ask the builder to create a landscaping plan that requires less water and maintenance. Many retirees even choose to live in homes that have maintenance-free exteriors, letting the community developer handle the landscaping.
All in all, downsizing your home can save you a considerable amount of money, especially if you’re focused on the end result when you make choices in the design of your home. Come talk to one of our Area Managers to see just how much you can save by purchasing a home with Sterling.