The Advantages Of Downsizing When You Retire

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The obvious ones:

  • Less upkeep
  • Lower utilities
  • Less cleaning
  • Less junk in the garage
  • Lower expenses means more cash on hand

Road blocks:

  • Capital Gains ($250,000 exclusion for single and $500,000 exclusion for married check with your tax professional)
  • Veteran’s benefits (health etc.)
  • Medicaid (if there is any equity or gain in the home while you are living or after you die Medicaid will request repayment)
  • Expense of moving
  • Expense of making your new home comfortable
  • Finding new Doctor’s, shopping, friends

The main reasons:

  • Comfort Zone vs Retirement Dream
  • Upgraded home
  • Closer to grandkids
  • Property Tax advantage in CA (Prop 60/90 transfer your current tax base to your new home if equal or lesser value)
  • *No mortgage payment

Possibly more cash on hand after sale depending if you have a current mortgage that needs to be paid off and proceeds are just enough for a down-payment on new property.

If you don’t think you have enough funds to purchase your retirement dream home with NO mortgage payment take a look at the HECM for Purchase loan aka Reverse Mortgage for Purchase. The program is insured by the government, you remain on Title, there can be equity to leave as an inheritance and much more.  If used properly a Reverse Mortgage can be the most versatile financial product in your toolbox!

Live in the community you love to visit!