Once the home is paid off

[Freda]

do you keep it and appreciate having no house payment?  Or trade off to something smaller with lower operating costs?

Our home will be paid off in a few years and I'm having a hard time with the idea of downsizing even though it's an awful lot of house for just the two of us.  (Approx 2000 square feet on .8 acre.)

One option we have is moving overseas for a few years for his job, and if we did that we'd have to decide whether to keep/sell/rent out as well.

I'm really coming to realize how many of my "financial" decisions are actually "emotional" ones!

[AJ]

I'm really coming to realize how many of my "financial" decisions are actually "emotional" ones!

Oh my yes!! Really, though, any spending beyond subsistence living is "emotional spending". We all do it...

Why do you think you are having a hard time with the idea of downsizing? Do you have a lot of stuff? Or, do you really like your neighbors? Or, is the large house a status symbol for you? Or, does moving just sound like a huge hassle? Or...?

[Freda]

I have a lot of stuff, I guess, but I'm not super attached to it.  I LOVE our neighbors and neighborhood.  I don't  think of it as a status symbol, it's a fairly conservative 50's subdivision.  The home itself is pretty efficient.  No air conditioning, and we have a boiler with baseboard water heat.  We've replaced the windows to be more efficient, and gone through insulating and rewiring/drywalling room by room since we've owned it.  Probably the least efficient thing we do is to use a window a/c unit for our 3 huskies when it is over 90 in the summer, which isn't usually for too long.

[Dynasty]

it's a fairly conservative 50's subdivision.  The home itself is pretty efficient.  No air conditioning, and we have a boiler with baseboard water heat.  We've replaced the windows to be more efficient,

Tsk tsk on replacing those probably wonderful 1950s wooden windows..

What you have with a 1950s house, is the beautiful union of excellent building material quality and excellent skilled labor at the time when the house was built.

I'd stay put. If you were to buy a newer house, oh I don't know say built any time from the 1960s to the present you're going to have a house built with crap materials and built with crap labor and built as quick as possible.

When I sell and buy a different house, I'm looking to move into a 1950s neighborhood for the reasons I posted above. 1950s architecture is pretty hit and miss, but the building quality during that era was generally pretty top notch.

[Freda]

Lol your view is idealized, my dear! 

This house has been a lot of work. The first winter it was about forty degrees inside. There was a visible breeze in one room due to the windows and no room had insulation. It was brick then cinderblock then plasterboard.  The kitchen had termites. There were live wires in some walls.  We are slowly upgrading the baseboard rod and fin assemblies.

We have worked a lot on this house in the last 8 years. We aren't even near done but it is at least comfortable and efficient now in terms of temperature.

[Dynasty]

Wow! Okay.

Maybe it would be better to move then. I was just picturing in my head the 1950s brick house I was renting with some roomates years ago, in a 1950s neighborhood.

Open expansive floor plan, solid feeling, comfortable.

Being on the wrong side of deferred maintenance is expensive.

[JohnGalt]

Why is the decision to stay in the house or downsize dependent upon paying it off?

If you decide that downsizing is the right move there's no need to wait until it's paid off.

As far as making the decision goes - you need to first figure out the financial side of it (ie how much more is it costing you to stay in the house vs downsizing, accounting for all costs including opportunity cost of investing the equity difference) and decide if that is worth more or less to you than the emotional side. 

[icefr]

If you decide that downsizing is the right move there's no need to wait until it's paid off.

As far as making the decision goes - you need to first figure out the financial side of it (ie how much more is it costing you to stay in the house vs downsizing, accounting for all costs including opportunity cost of investing the equity difference) and decide if that is worth more or less to you than the emotional side.

+1

If you downsize NOW, you could end up with no mortgage. So yes, this really is an emotional decision! I've had a hard time realizing that most of my financial decisions have been somewhat emotional as well.

[happy]

You've spent time and money in making the house comfortable, so living in it post mortgage is an option....enjoy but try to invest the amount you were paying on the mortgage, don't spend it.

If you decide to sell and down size, do the calculations carefully first, including moving costs, as John Galt says. You might come out way ahead.

When I did the math on selling and downsizing my too big house, the tax structures in our country made it much less favourable to move too often...I needed to hold my house for 10 years to come out ahead.