In the UK, one in 10 homeowners regret buying their home, with 12% citing that it needed more work done than they expected, and 6% saying they can’t really afford their mortgage, according to mortgage and loans provider Ocean Finance.
“Across the board, people are over-housed,” said Kevin Reardon, a financial planner with Shakespeare Wealth Management in Wisconsin in the US. “I heard one person describe it as, ‘Thirty years ago, you’d have a family with four kids living in a 2,000 square-foot house. Now you have a family with two kids living in a 4,000 square-foot house.”
Finding yourself living in a house you can’t afford is stressful. If homeownership is hurting your wallet, here’s what you need to consider.
What it will take: You’ll need the wherewithal to gather your financial information and face the numbers. It’s hard to admit it when you’re overspending or under earning, but if keeping your house doesn’t make financial sense, you may have to get comfortable with the idea of downsizing.
How long you need to prepare: If you’re in a cash flow bind, you don’t want to wait too long before you take action. But you should take some time to calculate the size of the problem. “A lot of times people don’t really look at their expenses,” said Julia Chung, a financial and estate planner with Facet Advisors in Langley, British Columbia in Canada. “They have a hard time managing the numbers.”