4 Ways Purchasing a Smaller Home can Save Money
Right now, with mortgage rates being lower than they have been for a long time, many homeowners can be tempted to purchase more homes than they can comfortably afford or one that is too large for the needs of day-to-day life.
Opting to purchase a smaller home can offer several advantages, though it may not seem like the more exciting choice.
Here are four ways in which a smaller home can help to save you money.
Lower Utility Bills
With a smaller amount of space, there is less to heat and light up, resulting in a lower utility bill cost. The cost of utilities is a major expense of homeownership, one that can sometimes be forgotten when purchasing a new home. Having less space to heat will help to save money on the overall cost of living.
Even the most energy-efficient of large homes will cost more money in utilities than smaller less efficient counterparts.
Encouragement to Purchase Less Stuff
With a smaller home, there is obviously less space to store stuff. This is one of the driving factors behind the tiny home movement. A considerably lesser amount of space means less money spent on items to fill it up, decorate, and store in the home.
Living in a smaller home helps to minimize a homeowner’s unnecessary spending. Less space means that when you are shopping just for fun you will ask yourself, where am I going to put it?
With this thought in the back of your head, you are more likely to be more selective on the purchase you make which will mean less money spent on items you do not need.
Lesser Repair and Maintenance Costs
When you purchase a home the responsibility of keeping it in good working condition is all yours. Repair and maintenance expenses can be costly and it is important to have money set aside for them to make sure you are not in a tight financial situation when the need to make them comes along.
Every home is going to need some repairs or upkeep within the first year of ownership even if it is a brand-new house. The nice thing about having a smaller home is that repair costs can be significantly less because there will be fewer materials to take care of and upkeep. For example, if you need to replace the roof at some point it will be much smaller and less of a cost to recover the smaller surface area.
The possibility to pay more money toward the mortgage and less on interest
A smaller home will come with a smaller price tag in most scenarios unless you are purchasing in a very high cost highly desirable and densely populated area. A lesser purchase price means a lesser monthly mortgage payment and this can also translate to being able to put more money down towards the principal payment on your mortgage.
If you pay down the life of your loan by paying extra every month (granted there are no early payment fees) you could save a large amount of money on interest. You shorten the life of your loan.
Purchasing a larger home that puts you at the top of your spendable budget will mean that you are merely paying mostly into the interest at the beginning of your loan. It will limit your ability to pay the loan off earlier and lock you into taking the long road to pay back the money.
In some cases, opting for a smaller property will allow you to have higher quality home and a less stressful lifestyle where you are not living paycheck to paycheck. It can also mean finding a property that might have less competition among other buyers.
For more information on buying a home in Park City and surrounding areas please contact us anytime.