A recent study by market research firm, Edelman Berland showed 1 out of 3 people thinking about selling their homes plan to buy a smaller house in the future.
Here are a few thoughts from well-known financial expert, Dave Ramsey. Ramsey discusses three financial advantages that can come from scaling down your home.
- While a smaller home does means you’ll have less space, it also means you’ll spend less time and money on maintaining your home. This usually means a lot less stress.
- Plus, you can save more money. For example, if you saved $500 a month on your mortgage payment, you’d be able to put $1–1.6 million more in the bank to help support you as you get older.
- You can also eliminate your mortgage by taking the proceeds from the sale of your old, bigger home and paying cash for a smaller, less expensive one. If that’s not an option, you can at least do a 15-year fixed rate mortgage. You can get about a 3% interest rate with a 20% down payment on your new home. So you could add the $500 you save every month to your new mortgage payment. You could pay off a $200,000 mortgage in just over 10 and half years and save nearly $16,000 with this strategy.
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