Real Estate - Downsizing can save you money
Large houses = Big expenses. Itís as simple as that. As utility
bills rise to heat bigger homes just as wear and tear on the house
increases with the houses size. All homeowners are finding ways to
save money nowadays with the crazy expenditures we have every month.
If you stop and think about it, downsizing can save you money.
There are four things a house costs. The mortgage, the insurance,
the taxes, and the utilities. By starting with the mortgage, you can
save money just by moving to a smaller home with less of a payment.
The larger home usually costs more so the mortgage will be larger.
By opting to sell and buy a smaller home, you can save some money on
the monthly mortgage payment. Not to mention if you have equity
built up in the larger home, you can really have a great down
payment on the new place. This would enable you to pay it off
earlier than the larger home, saving you even more money in interest
With the smaller home, the insurance premiums would be less. Again a
savings you would be able to see. This can really add up over the
years. The reason the premiums are lower is because it would take
less money to rebuild or repair if something were to go wrong.
Usually the taxes are based on the appraised value or sales price of
a home. They can also take into consideration the square footage and
the road frontage of the yard. The taxes in some areas are
astronomical. By downsizing you can save money because the taxes on
the new property will be significantly less. The square footage will
be lower. The appraised value will be less. Generally in a smaller
home the yard is smaller too. This is not always the case, but it
can be true in some areas. Either way the lower taxes will
definitely be an advantage for downsizing to a smaller home.
Downsizing can save you money with the utilities just because the
home is smaller. You do need to make sure the property is weather
tight. This means you will want to insulate where you need to, caulk
any leaky windows, or even restore them, and make sure weather
stripping is in place. The furnace or heat pump should also be
checked to make sure it is operating at full efficiency. This will
ensure you will save money on the fuel bills in the winter. The
electrical system should be up to code and as efficient as possible.
If you have fuses instead of breakers you may want to convert. When
you have completely weather proofed your home you will see a marked
difference in the utility bills.
Many people have started to downsize due to a loss of income or
illness in the family. This is becoming more and more common with
the economy the way it is right now. If downsizing can save you
money it may be worth exploring. Sit down and calculate how much you
could save over the next five years if you lived in a smaller home.
The figures may surprise you.
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