Our house is large, as in 2800+ square feet. We are a family of three, plus two dogs and a cat. It turns out, we do not need four bedrooms and we literally have rooms we don’t even walk into for months at a time.
I love our house. I love the location, the view, the land, but I don’t love the payment and I don’t love how big it is. It takes forever to clean, it is expensive to heat and we tend to accumulate a lot of stuff, just because we have so much space to stick stuff. The extra rooms are great when family visits, but that’s only one or two times a year. Lately, that just doesn’t seem like enough to justify the space and expense.
We purchased the house as a foreclosure in 2011 and got a great deal on it. It had been sitting empty for a year and it was during the mortgage crisis, so the market locally was a bit dead. Its value, with the minimal work we’ve done, has probably increased $45,000+ above what we spent on it in the last seven years.
We refinanced last year from a 30 year mortgage at 4.75% to a 10 year mortgage at 3.25% and are making huge headway because of that, but the thought of having that mortgage for 9.5 more years, when we could downsize and end up with little to no mortgage is hugely appealing. That extra cash flow would easily allow us to max out our 401ks.
Honestly, without daycare (PoniesandFIREjr starts kindergarten in fall of 2019) and our mortgage, either Mr. PoniesandFIRE or I could stop working one of our jobs and still make the same progress on our finances with a huge increase in quality of life.
This is not the first time we’ve thought about this, but during a long car ride yesterday, while listening to a BiggerPockets Money Podcast about live in flips (this one - https://www.biggerpockets.com/renewsblog/biggerpockets-money-podcast-05-jump-starting-early-fi-plans-live-in-flipping-mindy-jensen/), we realized we were sitting on that potential situation.
We could spend the next 6 months to a year working through some renovation projects and downsizing our stuff and then sell our house and walk away with enough money to buy another smaller fixer upper in cash, or very close. We could literally have NO MORTGAGE by the end of next year by moving!
Now, like I said, I love our home’s location and so many things about it, but you know what I love more? The idea of NO MORTGAGE. Plus, we’d have the added benefits of smaller utilities and insurance costs. We’d also have the mental simplicity of less stuff and a smaller home to maintain and clean.
Have you downsized your living arrangements for the sake of reaching FI sooner or simplifying your life? I’d love to hear other’s experiences with this…