SAN ANTONIO — Perhaps you're going to retire soon or your kids have flown the coop. Maybe you just want to save more money. There are many different reasons to downsize your home. Be sure to ask yourself these 5 questions before you make your decision.
1. Do you really want to move?
"Is this the house you want to move in for the rest of your life? Because if you really do want to stay there, then you have to figure out financially how to make that happen. The first thing you want to figure out is whether you want to move or not," suggested Karl Eggerss, senior wealth advisor and partner of Covenant.
2. Will your home allow you to age in place?
"How safe is this house for you? As you age, you’re going to need to put bars up, ramps up in the house. Is it suitable for you to live in 10, 15, years from now, versus currently," said Eggerss.
3. Does the home fit your future?
"Look at the appropriate size of the house you need. You’re probably in a house that was really built for a family. You had 2-3 kids, multiple bedrooms. Do you really need that now? I would say before you downsize, the flip-side of that is, do you have grandkids? Are those grandkids going to come over?" said Eggerss.
4. How much equity do you have in your home?
"A lot of people have equity in their house but they can’t use it for cash flow purposes. It’s stuck in the house. You can’t eat that equity. You can’t use it for groceries. Can you really use that equity?" said Eggerss. "In other words, can you downsize the house, buy something cheaper? And use that equity for your daily cash flow needs. Or it could be a situation where you may be a renter going forward and you end up selling the house as well."
5. How much will it cost to move?
"Before you decide whether or not to move, you need to decide whether you’re going someplace else and what the cost of that is going to be. Is it going to be assisted living? Is it going to be a smaller home purchase? Or a rental? Is it going to be an apartment? Really factor in all of those costs, what you’re saving, what you’re spending and then, see if that makes financial sense for you and your family," recommended Eggerss.