Originally Posted by JTOrt
I am concerned, however, on losing so much equity in case of unseen expenses. We have an economical California property we plan on spending the snowy seasons at.
Not sure what you're concerned about that would cause you to lose equity. If you put any equity released into investments, you still have that money unless there's a market crash. Of course, there are housing market crashes, too, so your equity isn't always safe sitting in a house.
In DH's and my case, downsizing and investing released equity hasn't been a part of the plan. We did move out of NJ to a much lower COL area at a very good time (2003) and had a large chunk of money we didn't need to buy a new house and invested that. I'm very glad we made that decision; home values have been stagnant here since then.
We'll be downsizing in the next year or so and are hoping to sink the equity in this house into another and not have a mortgage. When rates are low, it's always made sense to me to borrow, but now I want to decrease the cash outgo since I retired 3 months ago and I'm not planning to collect SS till I'm 70 (8.5 years from now).
The exception would be if we have another market crash between now and when we downsize. I may take out a mortgage and move the proceeds from the sale of our current house into investments.