303-915-6815
 Welcome to the COHomeSite.com Blog

2017-03-23 14:28:21
Downsizing in a Seller's Market

It's a Seller's Market! Should I Downsize Now?

It

A study by Edelman Berland reveals that 33% of homeowners who are contemplating selling their houses in the near future are planning to scale down. Let’s look at a few reasons why this might make sense for many homeowners, as the majority of the country is currently experiencing a seller’s market.

In a blog, Dave Ramsey, the financial guru, highlighted the advantages of selling your current house and downsizing into a smaller home that better serves your current needs. Ramsey explains three potential financial advantages to downsizing:

  1. A smaller home means less space, but it also means less time, stress and money spent on upkeep.
  2. Let’s assume you save $500 a month on your mortgage payment. In 30 years, you could have an additional $1–1.6 million in the bank to get you through your golden years.
  3. Use the proceeds from selling your current home to pay cash for a smaller one. Just imagine what you could do with no mortgage holding you down! If you can’t pay cash, aim for a 15-year fixed rate mortgage and put at least 10–20% down on your new home. Apply the $500 you saved from downsizing to your new monthly payment. At 3% interest, you could pay off a $200,000 mortgage in less than 10.5 years, saving almost $16,000 in the process.

Realtor.com also addressed downsizing in an article. They suggest that you ask yourself some questions before deciding if downsizing is right for you and your family. Here are two of their questions followed by their answers (in italics) and some additional information that could help.

Q: What kind of lifestyle do I want after I downsize?

A: “For some folks, it’s a matter of living a simpler life focused on family. Some might want to cross off travel destinations on their bucket lists. Some might want a low-maintenance community with high-end upgrades and social events. Decide what you want to achieve from your move first, and you’ll be able to better narrow down your housing options.”

Comments: Many homeowners are taking the profits from the sales of their current homes and splitting it in order to put down payments on smaller homes in their current locations, as well as on vacation/retirement homes where they plan to live when they retire.

This allows them to lock in the home price and mortgage interest rate at today’s values which makes sense financially as both home prices and interest rates are projected to rise.

Q: Have I built up enough equity in my current home to make a profit?

A: “For most homeowners, the answer is yes. This is if they’ve held on to their properties long enough to have positive equity that will be sizable enough to put a large down payment on their next home.”

Comments: A study by Fannie Mae revealed that only 37% of Americans believe that they have significant equity (> 20%) in their current home. In actuality, CoreLogic’s latest Equity Report revealed that 78.9% have greater than 20% equity. That equity could enable you to build the life you’ve always dreamt about.

Bottom Line

If you are debating downsizing your home and want to evaluate the options you currently have, let's meet up to help guide you through the process.  Call or Text us at 303-915-6815 or Email Us to explore your options - there's never an obligation.  Find us on Google+

 
Blog Archive
2019-04-18 13:04:29
Local 2019 Real Estate Trends (Millennial Buyers)

2019-04-17 15:46:12
Top Outdoor Features That Buyers Are Looking For

2019-04-17 15:45:50
Top Tips For A Summer Ready Home

2019-04-10 17:28:16
Is a Real Estate Investment Still Profitable?

2019-04-08 13:25:45
Your Home’s Spring Maintenance Checklist

2019-03-12 18:11:39
4 Reasons to Buy a Home in the Spring

2019-02-07 13:54:53
The KonMari Method: Helping You Prep Your House For Sale

2019-01-18 13:53:28
What is the Cost of Waiting Until Next Year to Buy?

2019-01-15 11:25:10
Buying a Home Young is the Key to Building Wealth

2018-12-10 12:33:03
What If I Wait A Year to Buy a Home?

2018-12-05 13:09:01
Where Are Interest Rates Headed in 2019?

2018-12-04 12:31:57
The #1 Reason to Not Wait Until Spring to Sell Your House

2018-11-06 10:47:52
5 Tips When Buying a Newly Constructed Home

2018-10-19 08:42:58
20 Tips for Preparing Your House for Sale This Fall [INFOGRAPHIC]

2018-10-08 12:04:11
Join Us for Our 2nd Annual Pumpkin Giveaway!

2018-10-02 09:53:11
Mortgage Interest Rates are Still Going Up… Should You Wait to Buy?

2018-09-25 11:24:11
Where Are Mortgage Interest Rates Headed In 2019?

2018-09-19 12:04:46
Lafayette Front Porch Streetscape Project is underway

2018-09-04 10:35:14
5 Reasons You Should Sell This Fall!

2018-08-22 13:10:54
5 Real Estate Reality TV Myths Explained

2018-08-21 15:27:54
Your Guide To Local Fun: August 2018

2018-08-17 14:52:58
One Huge Difference Between the 2008 Housing Market And Today

2018-08-15 13:49:20
Homes More Affordable Today than 1985-2000

2018-08-10 10:02:32
Buying Is Now 26.3% Cheaper Than Renting in the US

2018-08-08 16:17:22
Denver Café Named In Bon Appétit's Top 50 New Restaurants

Click here to see ALL articles.


Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.