Downsizing, Financial Planning
Do More With Less
January 5, 2012 by admin · Leave a Comment
Moving to a smaller home can shift your financial picture in a variety of ways.
You can lower or eliminate your house payments, reduce future energy or maintenance expenses, and convert your equity to cash for other investments or expenses without going into debt.
Here’s an example:A couple sells their home in Ravenna for $550,000 and buys a 2 br condo in a well maintained nearby older building for $280,000. After paying off their underlying mortgage of $89,000, less closing costs and fixup costs of $18000, they netted around $488,000 at closing.
They paid cash for their condo plus closing costs totaling $284,000, leaving them $204,000 in cash. Their previous monthly payment inculding mortgage, taxes, insurance, and long term maintenance was $1671/month. Their new monthly outlay for taxes, insurance and $248 monthly condo HOA dues is $448/mo. They have and extra $1223 per month to do with as they please, plus the extra time from no more yard work or maintenance.
This is one scenario. I am willing to help you fill in the numbers to develop yours.
