Things To Keep In Mind When Downsizing Your Home
Moving to a larger house is not the only time that things can change with your mortgage and home. Sometimes there comes the point when owning a home becomes a bit too much to handle, or maybe you’re an empty-nester and no longer need all that space to yourself.
Whatever the reason, downsizing is a great option when you no longer need a full-sized home. For homeowners who are fortunate enough to be mortgage-free and looking to scale down, you could be sitting on a gold mine! As experts in the field, we at Mortgages By Erin have compiled a few key points you have to keep in mind when downsizing your home.
If you still owe money on your current mortgage, it’s important to remember that downsizing during your current mortgage term could lead to breaking the mortgage and changing your terms. This means you will need to go through the entire qualification process again, including passing the mortgage stress test. There are also costs associated with selling your existing home and moving to something smaller and more affordable.
You will need to save up for upfront costs such as the deposit for your purchase, renovations to your existing home in preparation to list it, possible staging, etc. All of this can be stressful. This is why speaking with a mortgage professional should always be the first step. We can assist with calculating your estimated sale proceeds and working out your options in advance of listing your home for sale or making an offer on another.
Planning beforehand is essential! It can prepare you for what’s to come and ensure you are making informed decisions as you work your way through the process of selling and purchasing anew. Working with a mortgage professional in advance will give you the confidence you need when negotiating prices with sellers and buyers alike and that you’ll be approved for the financing you need, if applicable.
Many individuals looking to downsize are looking to do so for retirement purposes or because they are now empty-nesters. However, if you’re looking to downsize simply due to being unable to manage your mortgage or maintenance costs, there is an option called a “Reverse Mortgage.”
A reverse mortgage is a loan secured against the value of your home and is exclusively available for homeowners who are fifty-five years of age or older. A reverse mortgage allows eligible homeowners to convert up to 55% of the home’s value into tax-free cash while maintaining homeownership. You can use this to cover day-to-day costs or payout debts, and it only needs to be repaid if you move and/or sell the property.
If you are looking for a mortgage broker in Toronto, ON, reach out to us at Mortgages By Erin. With over ten years of experience, we have successfully helped hundreds of people realize their dream of homeownership. Our passion for helping others is the driving force behind our business. With the customer always in mind, we successfully and reliably assist our clients with the sometimes daunting task of obtaining mortgage financing by offering our advice, support, and sharing our wealth of knowledge.
We offer services like mortgage pre-approvals, home purchase mortgage, second mortgages, mortgage refinance, purchase/ refinance plus improvement mortgage, home equity lines of credit, mortgage renewal/transfer, self-employed mortgage, credit counseling for bruised credit, alternate and private mortgage lending, spousal buyout mortgage, permanent and temporary residents, etc. We offer our services to clients across Ontario, including the following areas: North York, Scarborough, Etobicoke, Toronto, Mississauga, Markham, Vaughan, and Richmond Hill, ON. To learn more about the services we offer, please click here. To get in touch with us, please click here.