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Do you Need to Downsize? A Quick Quiz


Perhaps a family of raccoons has taken up residence in that den you never use anymore,  or you’ve seen tumbleweeds congregating in that extra, extra bedroom. Or maybe you’ve just looked at your electric bill lately—and gasped. No matter your reasoning, if you’re a homeowner who feels you have more space than you really need, you’ve probably considered downsizing at some point. Here are questions to ask yourself when you are considering the change.

What is my equity position in the current home?
Having a positive equity position in your home is a big deal, since it makes it much easier, financially, to get into a new place. If you sell your current home and the amount you receive is less than you owe on your mortgage, you will have to make up the difference or face the consequences associated with a short sale, like damage to your credit. In other words, if you have a negative equity position, downsizing might not be the best option.

How much money will you save on monthly payments?
If you’ve given serious thought to downsizing, you’ve probably looked at what it would cost to live in a new place. When comparing that new monthly cost with current, don’t forget to include categories like taxes, and home maintenance & repairs. Also, pay close attention to utilities, since there can often be a dramatic difference between the cost for a larger versus smaller home. Sometimes these expenses alone can tip the scales making downsizing the better option.

Does my current neighborhood still fit my needs?
It’s not just the house that should be weighed when making a decision about downsizing. Maybe you moved into your current home for great schools and lots of public, recreational space for the kids?  As you get older, those things may matter less or not at all.  Downsizing could mean being able to find an area that’s better for your current needs, while also saving you money.

Will I be able to maintain the property in the years to come?
Maybe at one point you were gung-ho about climbing ladders to paint the house, or laying a new patio on your own.  But as you get older, you may be less physically agile with less energy.  Home maintenance may no longer be a DIY option.  And, if you can’t afford to hire someone to do these jobs,  the property could quickly fall into disrepair and lose value. Sometimes it’s best to sell a home when you are still able to keep it at its most attractive.

What’s my relationship with my stuff?
Many people find getting rid of a good deal of their accumulated belongings liberating. Others find it hard to let go, which may require a lot of storage space.  Either way, think about what space you’d need in a new home to store your treasured possessions.  Opting for a smaller home may mean making compromises on what you can keep.  Otherwise, you’ll need to find external storage which is costly over time and eat into savings from downsizing. 

What are your space needs for guests?
You may enjoy having a larger space to host family members or friends who come to visit. And they might be grateful for a free place to say (versus say a hotel at significant expense). Think about the maximum number of visitors you have at one time and if you can accommodate them in a smaller space. Many people find that even in a smaller place they are still able to have plenty of guests – but be aware of potential trade-offs in a smaller home. Once you’ve taken stock of your needs – speak to a good realtor with expert local knowledge of your current or prospective new neighborhood.  Your Credit Union may be able to help.  We own our mortgage company, Community Mortgage Funding (CMF), so can guarantee great rates and hand-holding service at every step.  We also offer a Home Rewards Program. This gives members exclusive access to outstanding, screened local realtors as well as substantial rebates on their commission.  Learn more here.

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