4 ways to free up your budget (and your life) with a smaller home

May 26, 2022

Does buying a smaller home mean financial freedom? It depends on your mortgage and your lifestyle. Let’s discuss the financial perks of downsizing, plus a few unexpected costs to watch out for.

 

The decision to downsize can be scary and liberating all at once. You may question where your adult children or guests will sleep at your smaller home. Or how your dog will cope with a smaller backyard (or no yard at all). There’s no doubt you’ll need to adjust. On the other hand, buying a smaller home can simplify your life and free up your budget. With less home to pay for every month, you could save for the future or spend more on your favorite hobbies. Here are four financial benefits of buying a smaller home.

 

1. Lower mortgage costs

Whether you’re purchasing a condo, house or townhome, smaller often means less expensive. You’ll love getting a smaller mortgage bill each month. And after you sell your current home, you could use any earned equity to fund your next down payment while pocketing anything left over.

 

2. Lower property taxes

When you buy a smaller home, you can usually expect a smaller bill for your property taxes, too. Simply put; less square footage means there’s less to tax. However, it’s important to remember property taxes vary by location. Do your research before buying. You should know the average cost of property taxes in your new area over the last five years.

 

3. Lower utility bills

Are you running the air conditioning in July in Arizona? Heating a house in Alaska in March? With less home to warm in winter and less space to cool in summer, you can expect significant savings. You’ll save even more if your next home has modern windows and good insulation.

 

4. Fewer maintenance costs

Keeping a home running takes cleaning, yardwork and repairs. Not only is that physically and emotionally exhausting, the cost adds up over time. With less physical space to maintain, you may save money on cleaning services, landscaping and outdoor supplies, DIY projects and more!

 

Hidden costs to watch for

Surprise expenses are the last thing you need in your smaller home. Don’t underestimate the cost of Home Ownership Association fees, which are charged monthly on top of your mortgage and can increase over time. It’s also important to think about the cost of living in your neighborhood and the cost of refurnishing your home. Will your current furniture fit the smaller layout? If not, you’ll need to save room in your budget.

 

Home, sweet home is about more than money

Despite the financial benefits of downsizing, it’s most important to find the right home for your personal and emotional needs. Some people downsize to help pay off debt, while others simply want a more manageable space. There’s no wrong way to do it. And luckily, there are a variety of mortgages designed to help finance exactly what you need.

 

 

Ready to downsize? Reach out to a mortgage loan officer in your area and they’ll help you get started.

Related content

Housing market trends and relocation impact

How liquid asset secured financing helps with cash flow

Commercial real estate in 2020: Keeping up with the pace of change

Capitalizing on growth in the private equity space

Renewing your custody contracts? Negotiate the fees.

Key considerations for launching an ILP

The startup scene in Reno: The story of Breadware

A first look at the new fund of funds rule

The startup scene in Reno: Emerging tech leads the way

Interval funds find growing popularity

Buying or leasing? Questions to ask before signing a contract

Common pitfalls to avoid in the equipment financing process

Finance or operating lease? Deciphering the legalese of equipment finance

ESG-focused investing: A closer look at the disclosure regulation

Integrating regulated and unregulated debt investment vehicles

The secret to successful service provider integration

Insource or outsource? 10 considerations

The unsung heroes of exchange-traded funds

4 questions you should ask about your custodian

Changes in credit reporting and what it means for homebuyers

Webinar: ESG for Corporations: Building an all-weather, long-lasting strategy

Unexpected cost savings may be hiding in your payment strategy

Safeguarding the payment experience through contactless

COVID-19 safety recommendations: Are you ready to reopen?

Employee benefit plan management: trustee vs. custodian

What’s the difference between Fannie Mae and Freddie Mac?

OCIO: An expanding trend in the investment industry

Changes in credit reporting and what it means for homebuyers

How institutional investors can meet demand for ESG investing

High-cost housing and down payment options in relocation

4 benefits of independent loan agents

At your service: outsourcing loan agency work

ABCs of ARP: Answers to American Rescue Plan questions for counties

Crypto + Relo: Mobility industry impacts

How to sell your business without emotions getting in the way

For today's relocating home buyers, time and money are everything

10 tips on how to run a successful family business

5 steps to take before transitioning your business

How entrepreneurs can plan for what matters most

Make your business legit

Talent acquisition 101: Building a small business dream team

How to establish your business credit score

How to test new business ideas

How I did it: Turned my side hustle into a full-time job

Costs to consider when starting a business

How to get started creating your business plan

How to redefine challenges with business collaboration

The costs of hiring a new employee

How to expand your business: Does a new location make sense?

How to build a content team

How to manage money tips

5 financial goals for the new year

How to track expenses

Do I need a financial advisor?

LGBTQ+ financial planning tips

Multigenerational household financial planning strategies

How to manage your money: 6 steps to take

Good debt vs. bad debt: Know the difference

Avoid these 6 common mistakes investors make

Year-end financial checklist

How to manage your finances when you're self-employed

Estate planning documents: Living trusts vs. will vs. living will

How to talk about money with your family

How to protect your digital assets in your estate plan

Financial steps to take after the death of a spouse

Reviewing your beneficiaries: A 5-step guide

6 tips for trust fund distribution to beneficiaries

4 reasons estate planning is important

Retirement expectations quiz

How to retire happy

Retirement planning in the gig economy

5 unexpected retirement expenses

Retirement planning strategies for dual-income families

How to build wealth at any age

Retirement income planning: 4 steps to take

4 tips to help you save for retirement in your 20s

Key milestone ages as you near and start retirement

Preparing for retirement: 8 steps to take

LGBTQ+ retirement planning: What you need to know

3 types of insurance you shouldn’t ignore

Is a Health Savings Account missing from your retirement plan?

8 steps to choosing a health insurance plan

What is Medicare? Understanding your coverage options

7 things to know about long-term care insurance

The connection between your health and financial well-being

Working after retirement: Factors to consider

4 steps to finding a charity to support

7 year-end tax planning tips

Should I itemize my taxes?

Bull and bear markets: What do they mean for you?

A guide to tax diversification and investing

What Is a 401(k)?

Investing myths: Separating fact from fiction in investing

5 financial benefits of investing in a vacation home

ETF vs. mutual fund: What’s the difference?

What are alternative investments?

4 times to consider rebalancing your portfolio

Start a Roth IRA for kids

4 major asset classes explained

Understanding yield vs. return

Do your investments match your financial goals?

How much money do I need to start investing?

7 diversification strategies for your investment portfolio

5 questions to help you determine your investment risk tolerance

Effects of inflation on investments

How to start investing to build wealth

What type of investor are you?

4 strategies for coping with market volatility

Investment strategies by age

How do interest rates affect investments?

Can fantasy football make you a better investor?

A beginner's guide to investing

Tips for navigating a medical hardship when you’re unable to work

How to plan and save for adoption and in vitro fertility treatment costs

11 essential things to do before baby comes

What documents do you need after a loved one dies?

Closing on a house checklist for buyers

Resources for managing financial matters after an unexpected death

What you need to know as the executor of an estate

Checklist: 10 questions to ask your home inspector

Student checklist: Preparing for college

Checklist: financial recovery after a natural disaster

Webinar: Uncover the cost: College diploma

Webinar: Bank Notes: College cost comparison

How I did it: Paid off student loans

Annual insurance review checklist

Recognize. React. Report. Caregivers can help protect against financial exploitation

Is online banking safe?

From LLC to S-corp: Choosing a small business entity

3 tips for saving money when moving to a new home

Is raising backyard chickens a good idea financially?

5 ways to maximize your garage sale profits 

Is it cheaper to build or buy a house?

Friction: How it can help achieve money goals

6 pandemic money habits to keep for the long term

How I did it: Learned to budget as a single mom

Your 4-step guide to financial planning

Webinar: Uncover the cost: Wedding

Adulting 101: How to make a budget plan

Tips to overcome three common savings hurdles

What military service taught me about money management

Webinar: Uncover the cost: International trip

Webinar: Mindset Matters: How to practice mindful spending

3 awkward situations Zelle can help avoid

Personal loans first-timer's guide: 7 questions to ask

How having savings gives you peace of mind

How to save money while helping the environment

How can I help my student manage money?

You can take these 18 budgeting tips straight to the bank

Save time and money with automatic bill pay

Multiple accounts can make it easier to follow a monthly budget

Personal finance for teens can empower your child

Which is better: Combining bank accounts before marriage — or after?

It's possible: 7 tips for breaking the spending cycle

U.S. Bank asks: Transitioning out of college life? What’s next?

Is it time to get a shared bank account with your partner?

Do you and your fiancé have compatible financial goals?

U.S. Bank asks: Do you know your finances?

How to save for a wedding

7 steps: How couples and single parents can prepare for child care costs

Don’t underestimate the importance of balancing your checking account

9 simple ways to save

Tips for working in the gig economy

Here’s how to create a budget for yourself

Dear Money Mentor: How do I set and track financial goals?

Money Moments: 3 smart financial strategies when caring for aging parents

Lost job finance tips: What to do when you lose your job

5 reasons why couples may have separate bank accounts

Money management guide to financial independence

30-day adulting challenge: Financial wellness tasks to complete in a month

Money Moments: How to manage your finances after a divorce

Money Moments: 8 dos and don’ts for saving money in your 30s

7 financial questions to consider when changing jobs

Travel for less: Smart (not cheap) ways to spend less on your next trip

What’s in your emergency fund?

What you need to know about renting

It’s time for a fresh start: A new way of thinking

Understanding guardianship and power of attorney in banking

How to stop living paycheck to paycheck post-pay increase

What financial advice would you give your younger self?

Financial gifts can be a valuable – and fun – choice for the holidays

Parent checklist: Preparing for college

Your financial aid guide: What are your options?

How to open and invest in a 529 plan

Be careful when taking out student loans

Using 529 plans for K-12 tuition

How grandparents can contribute to college funds instead of buying gifts

How to apply for federal student aid through the FAFSA

How to use debt to build wealth

7 steps to keep your personal and business finances separate

Know your debt-to-income ratio

Crypto + Homebuying: Impacts on the real estate market

For today's homebuyers, time and money are everything

Overcoming high interest rates: Getting your homeownership goals back on track

How I did it: Bought my dream home using equity

Is it cheaper to build or buy a house

Should you buy a house that’s still under construction?

Managing the impacts of appraisal gaps in a hot housing market

Bringing economic opportunity to underserved communities one home at a time

Preparing for homeownership: A guide for LGBTQ+ homebuyers

How I did it: Built living spaces to support my family

Spring cleaning checklist for your home: 5 budget-boosting tasks

House Hacks: How buying an investment property worked as my first home

Buying a home Q&A: What made three homeowners fall in love with their new home

Community activist achieves dream of homeownership

Saving for a down payment: Where should I keep my money?

What are conforming loan limits and why are they increasing

Military homeownership: Your guide to resources, financing and more

The lowdown on 6 myths about buying a home

Home buying myths: Realities of owning a home

How I did it: Bought a home without a 20 percent down payment

Checklist: 6 to-dos for after a move

4 ways to free up your budget (and your life) with a smaller home

Webinar: Uncover the cost: Building a home

Your guide to breaking the rental cycle

How I did it: My house remodel

Money Moments: Tips for selling your home

Quiz: How prepared are you to buy a home?

Dear Money Mentor: When should I refinance a mortgage?

Get more home for your money with these tips

First-time homebuyer’s guide to getting a mortgage

Beyond the mortgage: Other costs for homeowners

Are professional movers worth the cost?

Money Moments: How to finance a home addition

What is refinancing a mortgage?

10 questions to ask when hiring a contractor

5 things to avoid that can devalue your home

What is an escrow account? Do I have one?

What is a home equity line of credit (HELOC) and what can it be used for?

Building a dream home that fits your life

10 ways to increase your home’s curb appeal

What to know when buying a home with your significant other

How you can take advantage of low mortgage rates

Is it the right time to refinance your mortgage?

Webinar: Mortgage basics: How much house can you afford?

Webinar: Mortgage basics: Finding the right home loan for you

Should you get a home equity loan or a home equity line of credit?

Webinar: Mortgage basics: How does your credit score impact the homebuying experience?

These small home improvement projects offer big returns on investment

Webinar: Mortgage basics: What is refinancing, and is it right for you?

Webinar: Mortgage basics: Buying or renting – What’s right for you?

Webinar: Mortgage basics: Prequalification or pre-approval – What do I need?

Webinar: Mortgage basics: 3 Key steps in the homebuying process

8 steps to take before you buy a home

Home equity: Small ways to improve the value of your home

10 uses for a home equity loan

How do I prequalify for a mortgage?

How to use your home equity to finance home improvements

Is a home equity line of credit (HELOC) right for you?

4 questions to ask before you buy an investment property

Can you take advantage of the dead equity in your home?

6 questions to ask before buying a new home

Webinar: Uncover the cost: Home renovation

What you should know about buying a car

Car shopping: Buying versus leasing your next vehicle

How to winterize your vehicle

Questions to ask before buying a car

Take the stress out of buying your teen a car

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.