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San Diego real estate library
Real Estate - Downsizing can save you money
Big houses = Large expenses. It’s as simple as that. As
utility bills rise to heat bigger homes just as wear and tear on
the house increases with the houses size. All homeowners are
finding ways to save money nowadays with the crazy expenditures
we have every month. If you stop and think about it, downsizing
can save you money.
There are four things a house costs. The mortgage, the
insurance, the taxes, and the utilities. By starting with the
mortgage, you can save money just by moving to a smaller home
with less of a payment. The bigger home usually costs more so
the mortgage will be be more. By opting to sell and buy a
smaller home, you can save some money on the monthly mortgage
payment. Not to mention if you have equity built up in the
larger home, you can really have a good down payment on the new
place. This would enable you to pay it off earlier than the
larger home, saving you even more money in interest charges.
With the smaller home, the insurance premiums would be less.
Again a savings you would be able to see. This can really add up
over the years. The reason the premiums are lower is because it
would take less money to rebuild or fix if something were to go
wrong.
Usually the taxes are based on the appraised value or sales
price of a home. They can also take into consideration the
square footage and the road frontage of the yard. The taxes in
some areas are astronomical. By downsizing you can save money
because the taxes on the new property will be considerably less.
The square footage will be lower. The appraised value will be
less. Generally in a smaller home the yard is smaller too. This
is not always the case, but it can be true in some areas. Either
way the lower taxes will definitely be an advantage for
downsizing to a smaller home.
Downsizing can save you money with the utilities just because
the home is smaller. You do need to make sure the property is
weather tight. This means you will want to insulate where you
need to, caulk any leaky windows, or even replace them, and make
sure weather stripping is in place. The furnace or heat pump
should also be checked to make sure it is operating at full
efficiency. This will ensure you will save money on the fuel
bills in the winter. The electrical system should be up to code
and as efficient as possible. If you have fuses instead of
breakers you may want to convert. When you have completely
weather proofed your home you will see a marked difference in
the utility bills.
Many people have started to downsize due to a loss of income or
illness in the family. This is becoming more and more common
with the economy the way it is right now. If downsizing can save
you money it may be worth looking into. Sit down and calculate
how much you could save over the next five years if you lived in
a smaller home. The figures may surprise you.
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