Will Downsizing Your House Improve Your Finances?

Consumers figured out that giving up their daily McDonald’s breakfast on their way to work barely made a dent in their monthly budget.  Eventually the “brew your coffee at home and watch your credit card debt disappear” content stopped getting clicks, so personal finance experts stopped producing it and started saying what cash-strapped consumers already knew; it is the big expenses that make the biggest difference.  Housing costs at least a quarter of most Americans’ budgets.  Refinancing your home mortgage for a lower monthly payment or moving to another apartment with less expensive rent will free up more money in your budget for savings or debt repayment, but only if you can pull it off.  Reducing your housing expenses is one of those situations where you must spend money to get money.  Even if all you have to pay for is the cost of a move, that is still a considerable expense.  For help strategizing about how to address your debt problems with or without downsizing your house, contact a Miami debt lawyer.

How Feasible Is It to Sell Your House and Buy a Less Expensive One?

When people retire, or when their children grow up and move out of the house, they often want to reduce their housing expenses by selling their houses and moving to something smaller and farther from urban centers.  This is feasible only under certain circumstances.  The prices of almost all houses are astronomical, so you will only get major relief if you are moving to a housing development that is exclusively for retirees, or if you trade in your McMansion for a duplex in an economically depressed neighborhood.  It costs money to sell a house, and it costs money to buy one.

You might feel some relief if you sell your house, move in with relatives, and keep the proceeds of the sale in the bank.  Trading homeownership for renting is a move in the wrong direction.  When the proceeds of the sale of your house run out, you will be in a worse position than you were in when you started.

On the other hand, you can also benefit if the consolidation of households works in the other direction, too.  The whole family might gain greater financial stability if your adult children move in with you and contribute to the bills, instead of paying unaffordable rents on the other side of South Florida.

Refinancing your mortgage can help you save money on housing costs, but with today’s interest rates, you will not get much relief unless you have paid down your mortgage principal by many thousands of dollars since you first took out the mortgage.  A more feasible option might be to take out a home equity line of credit and use it to pay off other debts, so that your housing expenses no longer feel so painful.

Work With a Debt Lawyer About Coping With Debt as a Homeowner

A South Florida debt lawyer can help you if you are struggling with debts even though, as a homeowner, you should feel financially stable.  Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.

Source:

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