Real Estate - Downsizing can save you money
Large houses = Large expenses. Itís as simple as that. As utility bills grow 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 bigger home usually costs more so the mortgage will be be more. 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 charges.
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 a plus 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 change 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 significant difference in the utility bills.
Many people have begun 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 looking into. 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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