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Empty Nesters: Is It Time to Downsize Your Home?

The kids are grown. What now?

The kids are raised and grown and out on their own. You probably feel pride and joy, along with some sadness and loss mixed in, too. Along with all the “feels” that you’re going through, it’s time to consider: Should you sell your home and move to a smaller one?

 

This article explores what you should think over before downsizing, the factors that could influence the final decision and the steps to take if you decide to downsize.

 

Consider short-term goals

If your home was purchased to raise a family, it may suddenly feel too big after the children move out. The unused bedrooms and living spaces that used to host kids and their friends may feel lonely.

 

Before abandoning your current home, consider where you are in life and what you want in the next stage. Among the issues to explore are:

 

  • What are the pros and cons of downsizing?
  • Will you need space to allow children to return home temporarily?
  • If you do move, will your next house be your retirement home?
  • Are you in a financial position to move?
  • Are you emotionally ready to make a move?

Take the time to uncover your real feelings about downsizing before you jump in. It may be that the cons far outweigh the pros, or that you want to wait until you’re sure the kids are really finally out on their own before moving.

 

Consider the housing market

While examining your short-term needs is essential, so is paying attention to the current economic environment. A favorable housing market belongs in the “pro” column when considering a move.

 

Cindy Palmer, Mortgage Lender and Senior Vice President (NMLS# 484964) with Cadence Bank, explains that a favorable real estate market creates a “must move” scenario for the committed downsizer. “The only reason to postpone downsizing is if you are not fully committed to the decision,” says Palmer. “Get in while rates are still low! The cost of housing is continuing to move up each year, and waiting may cost you more in the long run.”

 

Conversely, if there’s not much inventory, housing prices are out of control and interest rates are sky-high, it might be better to hold onto your current home or rent a home until the market is more favorable.

 

When should I plan to downsize?

If all signs point to yes, Palmer recommends making the move to a smaller home two to three years before retirement. “Now that the big expenses are over, an empty-nester may think, ‘If I can cut my expenses, property expenses, landscaping, etc., there’s more money to put into retirement.’”

 

Consulting with a financial planner while downsizing helps ensure that empty-nesters are making the right moves to support a financially healthy retirement. However, as stated earlier, a favorable market may accelerate the timeline a bit.

 

Preparing to downsize

If you decide to move to a smaller home, take advantage of the following specialized service providers:

 

Real estate agents. Make sure to engage a realtor who is familiar with the needs of empty-nesters. An article in Clean State, a Better Homes and Gardens Real Estate magazine, profiles empty-nesters and discusses how real estate professionals can recognize the motivations and needs of down-sizers.

 

Move managers. A relatively new job title that’s aimed at serving older, downsizing folks is senior move manager. They help individuals get rid of a lifetime’s worth of “stuff” and make an easy transition into a smaller home. They help clients do everything from managing the movers, recommending floor plans and helping them declutter.

 

Builders. Builders are also taking note of the changes in real estate demands. “Empty-nesters might be looking at condos or garden homes,” Palmer says. “The fact that builders are keying into that to accommodate empty-nesters means it will be more expensive per square foot.”

 

What about financing?

Ask your banker about mortgage products that make sense for you. Palmer suggests considering cash flow when selecting a 10-year to 30-year or adjustable rate loan.

 

Even if the equity in your current home covers the cost of a smaller place, it may be better to stash some or all the cash in your retirement savings accounts. Talk with a banker who can provide solid advice.

 

Palmer added, “Many banks, including Cadence, offer fixed rate loans and ARM loans with different terms and rates. Sometimes it makes sense to have a longer-term loan when downsizing since it may not be a priority to accelerate payoff on a house that will ultimately be left to their heirs.”

 

Talk with a Cadence Bank mortgage professional

Here at Cadence Bank, we know how important it is to match the right home loan to our customers’ stage of life. Speak with one of our mortgage experts today to find out how we can help you downsize and live comfortably.

 

This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.



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