Interest rates are increasing and times are tough, but downsizing your home might not be in your best interest!
As household expenditure increases, more and more people are considering downsizing and selling their homes. However, before you do that, take on a simple exercise to calculate the costs involved when selling your home and consider:
• Estate agent commission
• Bond cancellation fees
• Movers and boxes
• Deposits to rent or the costs associated with buying a smaller property
• Possible school relocation, school uniforms etc
Remember that it is not in your or the bank’s interest to repossess your house, so if you are struggling then you should speak to them before you default on payment. Negotiating with them beforehand allows you to consider options such as short-term payment holidays, repayment of interest (only for a short period), or restructuring the terms of your home loan.
In the long run, it may be less expensive to bite the bullet, restructure your budget, and look for new ways to increase your income, decrease monthly expenses and keep your home… versus paying to sell, and losing out on the ROI for the years that you have already been paying.
Buying a home is a long-term investment and like all investments, there will be ups and downs. So keep your eye on the benefits of owning your own home and remember this too shall pass!