Financial Benefits of Downsizing
Let’s just get down to the nitty gritty of the basic example of $500, that right…just $500 a month saving. But first, we must pose a question for this ‘Homeowner Hypothesis!’
What if you reduce your mortgage by $500 a month and put that cash toward other financial goals?
- How about that new game called ‘debt attack?’
If you’re still paying off your children’s student loans: Let’s say you owe $18,000 on your student loan. With a 6% interest rate and a minimum payment of $200 a month, you’ll be paying on that loan for 10 more years!
But throw an additional $500 at your loan each month, and you’d trim almost 8 years of your pay-off date. You will be free from your child’s student debt in less than two-and-a-half years!
- Boost Your Retirement Fund
Simple, simple, simple…save that extra $500…and that’s just the savings from your reduced mortgage, and have $6000 each year to invest, store in the bank for a rainy day, or take a couple lavish vacations a year!
- Mortgage free?!
Yes, what it says above is real! You may be in the position to downsize to a home and buy it ‘mortgage free.’ But even if that’s not in the cards, with the right interest rates, a down payment average 10-20% down on a $150,000 to $200,00 mortgage, apply your $500 saving to your new monthly payment and be mortgage free in 10 years.