Knowing When It’s Time to Downsize Your Home

Senior couple signing paperwork wtih realtor outside recently sold home

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For many people, a “forever home” isn’t actually forever. The average American will in his or her lifetime, whether to transfer jobs, explore a new city, or downsize

Downsizing may sound overwhelming, but the process is simple. Here’s what you need to know.

Common Reasons to Downsize

As comfortable as you may be in your current home, there are plenty of reasons why it may be time to downsize.

  • You’re an empty nester. A five-bedroom home was perfect when you had kids running around. Now that they’ve moved out, however, you probably have more space than you know what to do with.
  • You can’t maintain a large property. Whether your health doesn’t allow it or you’re just tired of mowing the lawn and mopping floors, a smaller home means you can spend less time cleaning and more time on your hobbies.
  • You’ve tightened your budget. Maintaining a large home is expensive. Your utility bills — and possibly your insurance premiums and property taxes — are higher than they would be if you lived in a smaller place.

In all three of these situations, you have several options. A one-story home with a smaller yard and less square footage will cut down on time, maintenance, and money. Alternatively, if you like the current size of your home but not the size of your mortgage, consider moving to a less expensive neighborhood or downsizing to a condominium.

The First Steps to Take When Downsizing

House hunting is the most exciting part of the downsizing process. But before you can do that, you have to take care of a few other important — albeit not as fun — tasks.

  • Determine your needs. Consider what is most important to you and where you can cut back. If a small kitchen is an absolute “no” for you, you may have to compromise with a smaller living room or fewer bedrooms.
  • De-clutter. Moving is the best time to re-evaluate everything you own. Separate your must-have items from the superfluous and donate or sell what you no longer need.
  • Go digital. Save as much as you can digitally on your computer to free up storage space. Scan photos and important documents and upload CDs to your computer.

How Downsizing Affects Your Insurance

Moving into a smaller home may help you save money on your mortgage, utilities, and taxes. Because home insurance premiums are based on a variety of factors, including your home’s square footage and features, downsizing your home may help reduce your home insurance premiums as well.

If you downsize to a condominium, you’ll need to update your homeowners insurance to condo insurance, which can be less expensive, depending on your needs and property.

Are you ready to downsize? Learn more about home insurance, browse our free resources, and get a personalized quote.