It’s perfectly normal if you’ve ever wondered when your kids will finally move out. It’s equally normal to wonder, when they finally do move out, why they were in such a hurry. Life moves on, and it takes your kids with it. The question now: Is this the time to move into a smaller and more affordable home?
You may have a smaller mortgage payment. And if your current home is paid off or you have a lot of equity, you may be able to use the proceeds to buy your new home outright.
Your utility bills may be lower. A smaller home takes less energy to heat and cool.
You may have less home maintenance. Upkeep is much easier on a smaller home, which means savings for you.
On the other hand...
Depending on your plans and your current situation, downsizing your home may not actually save you any money. Consider these factors:
Has your home’s value dropped? Even with equity, it may not be enough to make buying a new, smaller home worth it.
Remember the fees. Buying a home involves commissions, closing costs, and more. And if you’re thinking about a condo, Homeowners Association fees can be pretty steep.
Consider the costs. Is the weather hotter where you’re moving? Are property taxes higher? Depending on where you move to, your cost of living may actually rise. You should also give some thought to life insurance for overall family financial protection, to pay off any mortgage you need to obtain for your new home, and possible estate planning needs.
Once your kids leave home, you might realize that all that empty space is just a waste of money. Does that mean it’s time to downsize? Take a look at your goals and desires, and be sure to involve your kids in your decision. Then, when you have a plan, run it by your financial advisor. Together, you can decide if your nest is where the heart is, or if it’s time for a new tree.
This material is provided for general and educational purposes only; it is not intended to provide legal, tax or investment advice. We recommend that you consult an independent legal or financial advisor for specific advice about your individual situation.Securities and investment advisory services offered through Voya Financial Advisors, Inc., member SIPC.Neither Voya® nor its affiliated companies provide tax or legal advice. Please consult with your tax and legal advisors regarding your individual situation.