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MANY DREAM OF retiring to the beach. My wife and I just did it. We recently sold our primary home outside Philadelphia and moved to our vacation home on the New Jersey Shore. The decision wasn’t easy. It was the result of a number of events coming together, including the pandemic, the hot real estate market and an attractive, but unexpected offer on our primary home.
We’d lived in our old home since 1994. But that doesn’t tell the whole story. My parents bought the house in 1965, so it’s where I grew up. Due to my parents’ health and financial circumstances, my wife and I bought it from them, and they lived with us for the remainder of their lives. Our children grew up in the house. Three of our parents died there. That’s a lot of memories to deal with.
In addition to the emotional attachment, this was truly a downsizing. We were leaving behind 2,400 square feet of living space, plus about 900 square feet of finished basement, a detached garage and a beautiful covered porch. This was way more than we needed or wanted to keep up. Meanwhile, the shore house is about 1,600 square feet and much more manageable.
Sound like the sort of thing you’d also like to do? Here are four key lessons we learned along the way.
1. Packing up. One of the common themes on HumbleDollar is a bias against accumulating lots of stuff. If you don’t share that view now, you will after you pack up your life’s possessions. It’s never too early to start paring down. My brother-in-law has a five-year rule. If they haven’t used it in the last five years, it goes.
In our case, we were selling a fully furnished house and moving to a fully furnished house. We identified many items that we wanted to move to the new house. There were also many items we were willing to part with. We were able to donate a ton of stuff to Goodwill and Habitat for Humanity. We gave items to a variety of family members. We also sold stuff on Facebook’s Marketplace.
Still, there were items we were on the fence about. We decided to rent a storage unit nearby, and we swore a blood oath that we would revisit those items in a year and make a final determination.
Lesson: If you’re even thinking about downsizing your home, it’s time to start downsizing your possessions. You’ll thank yourself when it’s time to move.
2. Home renovation. One thing that was obvious about our beach home: The kitchen needed major improvements in terms of both storage and functionality. We decided to do the renovation before we moved. When we renovated our kitchen in our old house, I acted as the general contractor, and did a lot of the demolition and construction. We saved thousands of dollars that way.
When we decided to totally renovate the shore house’s kitchen, we knew we had only a short period before we moved. We decided to use a local kitchen and bath company to manage the project. That freed us up to focus on packing up our old home. This worked out well. They removed the old kitchen and installed a new one in four weeks. There remained a short punch list of mostly cosmetic items, but we had a functional kitchen when we moved in.
Lesson: Sometimes it’s worth hiring professionals—especially if you’re time constrained.
3. Moving day. This turned out okay. We rented a 15-foot U-Haul truck, while also making use of a U-Haul service that gets you experienced help on both sides of the move. The movers were polite, energetic and very professional. We were pretty organized on both ends, so the whole thing from pick-up to drop-off was eight hours, including a two-hour drive. Total cost was about $650.
Lesson: If you’re moving a reasonable amount of stuff and you can drive a midsize truck, U-Haul is a cost-effective way to go.
4. Mortgage. The proceeds from our old home weren’t enough to pay off the entire mortgage on the shore home. With my wife still working, and with my consulting and pension income, we were fine carrying both houses. But part of the reason for this move is so my wife can reduce her hours and possibly retire in the near future. She plans to go half time right away and see how it goes from there.
Given all that, we had to decide what to do with the remaining mortgage balance on the beach house. After looking at refinancing, paying it off or leaving it as is, we decided to do a mortgage recast. This concept was new to me. It involves making a large, lump-sum payment on a mortgage. The lender then re-amortizes the new, smaller loan balance over the same term and at the same interest rate. The benefit is a reduced monthly payment and less total interest paid over the life of the loan.
Why choose a recast over a full refinancing? First, our interest rate is already fairly low, so we wouldn’t have saved much. The second reason is low fees. My lender charged $100 to recast. A refinance would have been thousands. A recast is very easy to do, especially compared to a refinance. One caveat: Not all lenders offer recasts and some types of loans aren’t eligible.
Lesson: Explore all options for financing your move.
Richard Connor is a semi-retired aerospace engineer with a keen interest in finance. He enjoys a wide variety of other interests, including chasing grandkids, space, sports, travel, winemaking and reading. Follow Rick on Twitter @RConnor609 and check out his earlier articles.
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We moved from the home where we raised our kids in 2019, the year we turned 59. Moved from a four-bedroom single family home with a garage to a three-bedroom new condo with a large storage closet. Decided from the get-go that we were not renting an extra storage unit. Made the kids come get the stuff they wanted. So, so happy we did the downsizing of all the stuff while we were still relatively young. It was a lot of work!
There are some good points made here, but I had to laugh when I read the comment from MarkP. My wife and I are exact opposites. I’m am much more inclined to part with clothes, furniture, and other household items than she is. She’s not a hoarder by any means, but is “reluctant” to part with certain stuff. Our 2 kids left home 20 years ago and we still have some of their stuff in the attic. I know they don’t want it, but she just can’t let go. At least it’s in the attic.
Great point on recasting; most people seem to be unaware of this option. I expect we’ll recast our mortgage at some point in the future – in order to keep the low rate we currently have. We own a couple assets that we expect to sell in the next 5-15 years (depends on external factors), and the proceeds from either would likely pay off at least a third of our remaining mortgage; recasting is perfect for a situation where you like your rates and plan on paying off a significant lump sum (and lowering your payments as a result.)
I had never heard of this, and it could be perfect for us in a few years when we retire. I’ll have to find out if our lender does this!
Moving is hell, no way around it. We moved from our home where we lived from 1975 to 2018. My wife was in the hospital having our fourth child the day before we moved into the house in 1975. My fear in moving the last time mostly emotional thinking of all the memories. There were moments packing up where tears were there and my wife and I had a brief cry when we saw the place empty.
HOWEVER, it didn’t take long to enjoy the new condo and to realize it wasn’t the building that made memories, but the people who lived there. We started making new memories. In fact, we used our new clubhouse to hokd my wife’s 80th birthday party with a lot more friends and family than our old house could hold. It was only COVID that suspended the family gatherings, and grandkids sleepovers.
Thanks. It’ll be a good reference when it’s time to move. I hope your brother-in-law has a partner that shares his embrace of the five-year rule. My experience is that a couple often disagrees on what to toss so it stays.