3 main advantages
- Frees up cash – Invest the money, buy an annuity to create monthly income or use it to cover expenses.
- May reduce costs – There are generally fewer costs if you buy a smaller home or rent.
- May keep some equity – If you sell and buy a smaller home, you keep some equity in an asset that may go up in value. That means you can leave more to your family or estate.
If you sell, you may be giving up a home you love in an area you like whether you buy a cheaper home or rent. Here are some other things to consider:
- If you buy something less expensive – You still have to pay property tax and costs to maintain your home. Your home equity may be reduced, which means less equity when you sell or less left to your estate.
- If you rent – You’ll pay a monthly rent payment. You may have to pay taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition on any unshelteredUnsheltered A regular investment or account that does not shelter your money from tax. In other words, you have to pay tax on your savings and the money you make investing them.+ read full definition investments you make using the money from your home. And you have no opportunity for future growth in the value of your home.
Selling your home may:
- free up cash
- reduce your costs
- keep some equityEquity Two meanings: 1. The part of investment you have paid for in cash. Example: you may have equity in a home or a business. 2. Investments in the stock market. Example: equity mutual funds.+ read full definition if you buy a new home