3 Financial Benefits of Downsizing Your Home
It’s been a tough year for many financially. Thankfully, the country is opening up a bit and the economy is slowly rebounding. However, saving money and eliminating some debt would help a lot of families right now.
What would happen if you could decrease your mortgage by $500 a month and put that cash toward other financial goals? You could do this by downsizing your home!
1. Reduce your Debt
If you’re working hard to kick debt to the curb, downsizing your home is a huge way to get started.
With a lower monthly mortgage payment, you can start paying off your other debts in greater increments. Imagine being free from your student loans or car payments in two years rather than ten!
Let’s say you owe $18,000 on your student loan. With a 6% interest rate and a minimum payment of $200 a month, you’ll be paying on that loan for 10 more years!
But throw an additional $500 at your loan each month, and you’d trim seven-plus years off your payoff date. You could be free from your student debt in less than two-and-a-half years!
2. Boost Your Retirement Fund
After you’ve made sure that you’re debt is under control and you’ve established a fully-funded emergency fund, it’s time to build wealth for the future.
Did you know that experts recommend investing 15% of your household income! If you’re still working your way up to 15%, that extra $500 could be the push you need to get there. Think about the difference $500 could make!
In 30 years, you could have an additional $1.1–1.7 million in the bank to get you through your golden years.
3. Pay Off Your Mortgage
Be mortgage free!! Another smart way to use the extra money you get from downsizing your home: Trade in your mortgage for a paid-off home! 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, speak to your mortgage lender about which options will work best for you.
If you would like more information about the possibility of downsizing your home, contact us. We can answer your questions, get you a real Market Analysis on your home’s value, set you up with a plan, and even introduce you to a great mortgage lender if you need one.