To downsize can be a big decision. There is a lot to consider, such as cost, future plans, family, etc. We have a few tips to help you make an informed decision.
- Do you have enough equity in your current home to make a good profit? If you have stayed in your home for awhile chances are you have built enough equity to make a down payment on your next home. If you have a significant amount of debt to pay off, you may want to consider waiting before selling your home in order to downsize.
- What will your budget look like? If your retirement is coming soon or you have already retired, you may be on a fixed income. Downsizing may be a good choice, especially if the new home is less expensive to live in and maintain. Consider insurance costs, travel plans, etc. and keep in mind that ideally, less than 30% of your monthly income should go towards housing.
- What lifestyle do you want to live? After you downsize, do you want a very low maintenance home to make room for traveling, etc? Maybe you want a luxurious home that you can entertain family and friends in frequently. Decide how you want to live before taking the plunge and downsizing.