Is it time to consider downsizing?

Is it time to consider downsizing your home? As we move through life, our needs and wants evolve. This is also true for homeowners! The idea of downsizing is appealing to many homeowners, for a variety of reasons. These could include lifestyle changes, financial motivations, or a desire for less home maintenance. However, this is a decision that requires serious planning and consideration. Here, we explore who downsizing is right for and how a broker can help streamline the process.

Who is a good candidate for downsizing?

There are a few key groups of people who may be most interested in the idea of downsizing. First, we have empty nesters. As children grow up and start to move out of the family home, homeowners may find they don’t need all the extra space they suddenly have. After all, maintaining a five bedroom home with only two people is a lot of work! A smaller home is certainly easier to maintain. Next, we have retirees. As people get older and their income decreases, smaller homes often become attractive. They require less physical labour to maintain, and often come with lower utility bills and living expenses. This frees up money for homeowners to use to support their retirement.

Finally, another group of people who might want to consider downsizing are those who want to live in a more urban area. City dwellers often find it necessary to purchase a smaller home if they want to live in a downtown core. This is due to a lower supply of large homes, and higher prices of those bigger properties. However, many people want to live in an urban area for its convenience and accessibility! This is where downsizing often comes into the picture.

Important considerations

As beneficial as downsizing can be, there are some items to consider! First is the financial impact. Downsizing can provide financial benefits, but there are still some big costs involved. Selling your current home, buying a new property, and moving expenses can add up. It’s important to determine how your long-term savings compare to these upfront expenses.

Moving to a smaller home can also involve a big lifestyle shift. It’s easy to underestimate how much space you need, or enjoy having. Before moving, take some time to consider how a new living arrangement will fit into your daily life. Do you still want room to maintain a nice garden, for example, or take on extra hobbies? These are easy things to overlook, but important to think about. Plus, there is the simple fact that moving house can be emotionally challenging. Odds are you have created lots of memories in your home, and it’s natural to have some difficulty letting go. It’s best to prepare for these feelings ahead of time, so you aren’t overwhelmed by them once it’s time to start packing.

Should you rent or buy your next home?

Once you decide to downsize, you need to figure out your next steps. This means determining whether you want to buy or rent your next home. Purchasing a smaller home can be a good investment, especially if you want to stay put for the long-term. However, it does still require a significant financial commitment, and you are responsible for maintenance and repairs. Renting offers a bit more flexibility, which can be ideal if you’re unsure about where you want to settle. It allows you to test out a new living situation without the long-term commitment of purchasing. Of course, this means you won’t be able to build home equity as a renter.

How can a broker help you?

Anyone who wants to consider downsizing should get in touch with their mortgage broker! Brokers have a wide network of professional connections. These include real estate agents and lenders, both of which will be important during the selling process. Your broker can connect you with reliable professionals to help create a smooth transition to your new home.

Downsizing your home is a big decision that can offer numerous benefits. However, it's essential to carefully consider your motivations, financial situation, and future needs. Whether you choose to buy or rent your next home, using a broker can make the process more manageable and successful.

If you have any questions about your mortgage, get in touch with me!