To Downsize or Not Downsize: The Advantages and Disadvantages
Downsizing is a choice for people that want to swap out their home for something that is more manageable or smaller. The primary reason most people downsize is to save money. It is quite advantageous to downsize as you have increased cash flow, lower utility bills, reduced consumption, and minimized stress.
Living in a smaller home can save you a significant amount of money. Utility bills, house insurance, property taxes, etc. are a lot less when you downsize. It is less work to live in a smaller home since you don’t spend as much time taking care of their property. If you move from a house into a condo, you will eliminate tasks you previously had to take care of such as shovelling snow or raking leaves.
However, it’s understandable that a lot of people do not want to downsize since it is difficult to separate yourself from a home that you are attached to. You are investing years and years of valuable time and memories into a home by furnishing it, paying off its mortgage, and raising a family. Selling your home comes with costs such as realtor commissions, moving costs and/or closing fees.
A viable alternative option to downsizing is to release equity from your home. There is the option of a reverse mortgage which is a loan secured against the value of your home. It is eligible for Canadian homeowners and those aged 55 or older. To qualify, you will be assessed by the following factors: you and your spouse’s age, location of your home, type of home, appraised value of home, condition of home, and your home equity. However, there are risks associated with this kind of loan so it’s important to consult an experienced mortgage professional at (416)-621-7501.