Downsizing your house

[ziggy29]

Thanks for all the posts and advice. I will say that we are currently cleaning out the junk, while we did not think we were spoiling our kids it became very clear that they did not appreciate the plethora of toys they had. So today we cleaned out the basement and let them choose 4 toys each, rest will be donated. We told them no more toys from mom and dad, something you want,something you need,something to wear and something to read is what santa will bring every christmas.

The downsizing will continue with my wife and I as well to show the kids that we practice what we preach. I have a 2017 M4 that I don't get to drive as much as I would like and in the spirit of decluttering its getting sold shortly

While downsizing the house might make sense for a few reasons down the road, I don't think there is a huge benefit to be had for doing it now (the financial windfall will be smaller than you expect because of costs of selling the home, moving expenses, getting the house ready to sell, et cetera). And your wife is happy there, and not uprooting your kids, keeping them in the same school with the same friends, is worth something as well. But getting rid of stuff now and keeping it less cluttered is good practice for when and if you do move to something smaller. You will still have that option when the nest is empty, and then it might make a lot more sense.

Not to mention that when you buy a new home, it's not going to be "exactly" what you want and you can very easily sink well into five figures making changes to make it "your own". Your current house is more or less already built as you want it.

So all that said, what is a $250K "windfall" on paper (in terms of difference in home value) might be half that after cost of sales, moving expenses, getting the house ready for show, and fixing up the new home to be what you want. And it could easily result in a $100K hit to net worth.

 

[HI Bill]

If our income stays close to what we are currently making we will invest nearly 250-300k a year for retirement vs 150k + pay down the any mortgage in 5-6 years.

I was going to vote "sell" before I read this. The difference between your current house and the one you would replace it with is less than a year's savings for you. To me, being in a custom-built house, that fits all of your needs/wants is worth one year of your work life. But that's the question you need to answer. Is it? Of course, moving would take a couple of months of your life, so now, you're down to 10 months or less.

 

[CardsFan]

We downsized from our custom built dream home (on a lake) about 5 years before retiring, but we had lived there 11 years, and the primary motivator for the move was not the financial benefit (though it was substantial). DW was getting tired of driving the winding narrow roads, and we were a long way from family and friends (and hospitals).

In your case, I would stay put in a house you both are happy with, refi for 15 years, not worry about paying the loan off faster than that, and enjoy life.

 

[Katsmeow]

I am a bit confused by the situation as you mention downsizing but then don't talk about the size of your house, just its cost. Downsizing -- moving to a smaller house -- does not necessarily mean moving to a less expensive house. We "downsized" last year, moving to a smaller house. It was, however, both older and more expensive. Location trumps size and age of house.

Your concerns seem to be more about cost rather than size of the house. If the issue is size then you need to look at how you use your house now and how you think it will be used in the future. Since you have kids you need to consider them as well. Also as they get older they may want to have friends over and you may like having more space then. Many people downsize after the kids are gone, not while they are still there.

 

[Hyper]

We built a two bd rm, 1 bath, 1005 sq ft home one level (happy knees). Yet we have the biggest yard to play in called the NF!