On Aug 10, 5:57*pm, "Ray" wrote:
You're right -- a simple question, and you're the only one who gave the
simple answer I was looking for. Many thanks.

"DerbyDad03" wrote in message

...
On Aug 10, 10:06 am, "Ray" wrote:





This isn't really a "home repair" question, but some readers of the
newsgroup might help, based on experience.

I have a sister, single and living alone, who needs to begin drawing down
the equity in her home. She's 81, not in the best of health. The appraised
value of the home is $500,000, with no mortgage at this time.

I've looked into "reverse mortgages" a bit and there are aspects of these
that bother me -- not the least being substantial activation costs.

We are considering an alternative of simply taking a 30-year mortgage for
the maximum we can in such a loan. We would then invest the proceeds in an
ETF muni-bond fund and begin drawing down the principal at $30,000 a year.

My question is, how much can we expect to borrow? I would hope to get
$400,000, which would be 80 percent of the appraised value. Is that a
realistic possibility?

"I would hope to get $400,000...begin drawing down the principal
at $30,000 a year"

$400,000 /$30,000 per year gets her 13.33 years of income.

"She's 81..."

81 + 13.33 = 94.33

"...not in the best of health"

81 + 13.33 = 94.33

Why would you borrow so much?

"invest the proceeds in an ETF muni-bond fund"

Which way are interest rates going to go in the fairly near future?
Hint: They sure can't go much lower!

What happens to bond prices when interest rates go up? *Hint: If you
have a $1000 bond paying 5% and new $1000 bonds are paying 6%, do you
think anyone will give you $1000 for your bond?

Do you think your sister is going to realize enough gain to make the
payments on the loan as well as meet her living expenses?

Run your plan by the bank and see if they'll lend you $400,000 using a
muni-bond fund as the source of income to be used to pay it back.

As I suggested in another thread, go see an Estate Planning Attorney
and put together a solid plan to protect your sister and her assets.- Hide quoted text -

- Show quoted text -

"You're right -- a simple question..."

I hope you're not talking to me!

In no way did I imply that it was a simple question. Infact, I hope I
implied that it was uts the opposite.

Don't ask questions of this importance in a friggin' home repair
newsgroup. Get your sister's 81 YO butt to an Elder Care attorney and
get the right answers for her specific situation.