3 Advantages of Buying a Smaller Home
Depending on where you live, housing prices may have shot up over the past year. While this is great for homeowners — and a positive sign for the economy in general — it can be disheartening if you're finding yourself priced out of favorite neighborhoods or home styles.
If the real estate market’s getting you down, cheer up! This may be an opportunity to open up to a whole array of homes that are somewhat smaller than what you thought your dream home would be. Buying a smaller home comes with all kinds of hidden advantages. Consider the bright sides of buying a little less space.
A Lower Price Saves More Money Than You Think
If you can't afford a favorite $500,000 dream house, a smaller place nearby that costs $300,000 will save $200,000, right? Actually, no — the savings are even greater. A $500,000 30-year mortgage at 4 percent interest will end up costing an additional $344,139.20 in interest, while the same mortgage for a $300,000 home will cost just $210,233.52 extra.
Over the life of the loan, that's a savings of $133,905.68 on top of the $200,000 sticker price reduction. You'll probably also pay less for taxes and homeowners insurance, so the savings continue over a lifetime. Spend a little time playing with a mortgage calculator to see how this will work for the houses you're looking at.
There's Less to Worry About
It's just plain easier to live in a smaller house. You'll probably have less yard work as well as lower costs for maintenance, thanks to needing fewer materials, and less time to get things done. If you're thinking of investing in a fixer-upper, you'll most likely be able to turn it into your ideal living space in less time than a bigger house would take.
Your weekly or monthly chores will also go by much faster without as many square feet of carpets to vacuum and woodwork to dust. With less house to worry about, you'll have more time to enjoy hobbies and your social life — a surprisingly big boost to one's overall happiness.
You'll Get to Curate Your Belongings
There's a whole movement afoot that centers around getting rid of excess belongings to lead a happier life. While no one expects you to become a monastic minimalist, choosing to live in a smaller house provides an opportunity to curate your items for a more streamlined existence. Instead of being overwhelmed with choices from a giant walk-in closet, you'll have just what you need and use.
The same goes for sporting equipment and kitchen gadgets. And that extra bedroom you had your eye on? With fewer empty rooms to outfit, you'll experience far less temptation to buy things to fill up the empty space.
In general, a smaller house requires less time and energy than a similar house with 10 or 20 percent more room. There are certainly financial incentives, but you may find that the psychological benefits convert you to the many joys of small homeownership. Keep these advantages in mind as you continue house hunting!