4 key points to consider before downsizing

Are you getting ready to downsize and move to a smaller home? Home owners may choose to downsize for a variety of reasons. You might be an empty nester for the first time in years and no longer need several bedrooms for children. You may crave a home where you can do less housework and property maintenance. Maybe you are downsizing for financial reasons and want to save some money. Whatever the case, downsizing requires a good amount of preparation and planning, just like any home purchase. Here are four key points to think about before you put your home on the market!

#1 How much smaller you want to go

One of the first questions you should ask yourself is how much you want to downsize. Making the decision to downsize means you already know you want to move into a smaller home. However, it’s important to decide what size you are looking for. Are you looking to move into a 3-bedroom bungalow, a condo, or a tiny home? Downsizing means something different to everybody! 

Knowing what property style you want is essential for your future housing hunt. It helps guide your search and ensures your real estate agent can find properties that match your needs. Just like with first-time and repeat buyers, people looking to downsize are not all searching for the same thing. Think about how much extra space you currently have, and what you would like to eliminate with your next property. 

#2 Your timeline 

How urgent is your downsizing journey? Is it something you want to do right away, or can it wait? Depending on your situation, you may approach the market differently. If you want to make the move as soon as possible, you will be entering a summer/fall market where buyers and sellers are more active compared to the winter months. This means there are likely more listings available, but also more competition in the form of other buyers. However, if you are not in a rush, this gives you the option to wait until the right opportunity comes along. You might enter the market in a month, or in a year. 

You should also take this time to consider your budget. How much are you hoping to spend on your home? Are you hoping to earn a profit from the sale of your current house? These questions lead us into the next big item to think about, which is your future plans for your finances. 

#3 Your future financial plans 

For many people, downsizing is closely related to their financial goals for the future. It’s very common for home owners to think about how downsizing will affect their finances and what that means for their future selves. In fact, it’s smart to start planning this out! 

Where do you see yourself in five or 10 years? This may have an impact on what you decide to do after you downsize. For example, maybe you want to do lots of traveling, and hope to use money from your home’s sale to do so. If you have children who are growing up, you might want to contribute to a post-secondary fund for them. If you are approaching retirement, you likely want to set some money aside for this stage of your life. It’s good to start considering how much money you think you might receive from your home’s sale, and what you plan to do with it. This will help you make the best decisions in terms of where to put your money, how to invest it, and how much to save. You don’t need to have a plan for every single dollar, but a general plan will ensure you are making the most of your property’s sale.

#5 The importance of working with a broker

As with any type of home purchase, downsizing is a much smoother process when you work with a mortgage broker! Many people who downsize are in a unique stage of life, such as retirement, and are downsizing for the first time. This means navigating the housing market can feel more complicated, and the need for professional guidance grows. Your mortgage broker can help find the mortgage product that matches your current situation and supports your long-term financial goals. Plus, many lenders only work with clients who come through a broker, giving you access to better products and rates. There is no downside to using a mortgage broker when buying a home, but you risk facing a major loss if you try to go it alone. 

Downsizing is an exciting stage for many people as they move into a new chapter in their lives. The last thing you want is to make the experience more stressful than it needs to be! With some prep work, financial goal-setting, and a trusted mortgage broker, you can help yourself move through this journey with confidence. Don’t hesitate to reach out to us if buying a home is in your future. We are ready to help!

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.