"Ray" wrote in message
...
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?


*Don't borrow money to invest. The reverse mortgage should only be used as
a last resort. The fees are very high and you don't get anywhere near what
the property is actually worth. Selling the house and moving to a senior's
only community is my suggestion, though I realize it is not always
desirable. Perhaps selling the house to someone with the stipulation that
she will live there as a rental tenant is a possibility.