If you're thinking of retiring, you might want to consider how downsizing will affect your finances and if the move will benefit you in the long term. Whilst moving costs can be high; you could be saving plenty with lower maintenance costs and household bills, as well as the selling of furniture and household items you no longer need.
2. Equity release
Equity release is available for homeowners aged over 55. The release is tax-free and is an alternative way of gaining access to money tied up in your property rather than selling it. There are two types of equity release schemes to consider; a lifetime mortgage and home reversion schemes. A lifetime mortgage is like a typical mortgage, except it doesn't have to be paid off in monthly repayments, rather when the last owner passes away or moves into care. A home reversion scheme is where you agree to sell your home or part of it whilst still occupying and owning the property. This scheme doesn't require any interest payments but works by sharing the proceeds of the property sale with the home reversion company once the last survivor passes away.
3. Pensions & savings
Long-term financial security might be a factor in your choice to downsize, with downsizing often saving you money to add to your retirement savings if you move into a less expensive property. Speaking to a Financial Advisor is the first step on getting a clear picture of where you stand.
4. Consider what you really need
If you're thinking of downsizing, there's no doubt you want to decrease your number of bedrooms. Downsizing might also include reducing the number of bathrooms and reception rooms, which might be something to consider with the living space you're used to.
5. What will your budget be?
Downsizing doesn't always equate to a lower purchase price. Considerations such as area, home specifications and stamp duty, long-term costs such as council tax, and moving costs and conveyancing are crucial in thinking about the total cost.
6. Downsizing means downsizing
Think about your current furnishings and possessions. Will you be able to take everything with you to your new home? If you've got anything you don't need, this is an excellent opportunity to sell your unwanted furniture as every penny helps cover the move's cost.
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