This post is seventh in the series on my family’s decision to downsize: the good, the bad, and the ugly. Links to previous posts can be found at the end of this article.
What sounds worse to you: owning and paying for two homes at the same time, not knowing how long that will go on? Or having sold your current home without knowing where you’re going to next?
Answers may vary, of course. In fact, they may vary from one moment to the next. The BREL Team in Toronto have written a great article on the pros and cons of each scenario, so I won’t repeat that information here, but you should definitely read it.
For some people, there is no choice of course: you may not qualify for a mortgage without having first sold your home. And even if you HAVE sold your home, even if that sale will lead to large chunks of equity, getting a mortgage is not a given if your credit record has taken a hit. A client of mine recently found that out, and it was painful. It also threw a giant monkey wrench into their future plans. (Again, get your butt to a mortgage specialist or mortgage broker please. Today.)
If buying before selling IS an option for you, like it was for us, this is both a blessing and a curse. Let me paint the picture again: we were down to one commission-based income in the family, we had been using our line of credit as an ATM for some time, we were tired of feeling strapped and feeling the need to keep up with the Joneses … and the stress of all of this was taking its toll.
So, to ease that stress, we decided to … buy ANOTHER home! Yes! Perfect! Brilliant, really. 🙂
I mean, I can laugh now. But at the time, what sounded like such a great idea actually led to several more months of stress while we paid two mortgages and two hydro bills and two sets of insurance and — as icing on the cake — renovations on the second house! I mean, we were ecstatic that we had the time to do renovations before we moved into our little house, but — here’s a small detail that we did not think about at the moment — the contractor needs to get paid along the way, not just at the end. And until our house was sold, there was no money coming in. Ahahahahaha!
Stress can kill you. Literally. So you’ve gotta be really careful here and really think about what will cause you the least amount of angst: not knowing where you are going to next, or paying for two homes for an indeterminate period of time. Angst is baked into this process of downsizing, so there’s no avoiding it. But there is, perhaps, minimizing it — for you.
That feeling though? When your house has sold, and you finally have cash, and can pay all of your bills, in full, early even, with a clear mind and a clean balance sheet? Well, there’s nothing like it.
And THAT’S what I wish you could feel from the very beginning of this process — the calm and serenity that comes with knowing that you’ve got it covered, that you are taking care of things, that you have taken the reins and are making decisions that will lead you to peace and away from chaos and angst. THAT is the feeling I wish I could pocket and spread for everyone facing the decision to downsize.
It’s all worth it in the end. I promise.
Posts in this series:
- When Downsizing is Right-Sizing
- This is Your Life, So You’d Better Take the Reins: When Downsizing is Right-Sizing
- Cutting the Cable Won’t Cut It: When Downsizing is Right-Sizing
- Selling a Lifestyle Change: When Downsizing is Right-Sizing
- Ego is a B*tch: When Downsizing is Right-Sizing
- The Next Reality Check: When Downsizing is Right-Sizing
- Pick a Poison and Buckle Up: When Downsizing is Right-Sizing