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?

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?
Hi,
No family lawyer, accountant, bank manager/financial planner to consult
with? Start with them.

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?

Have you looked into reverse mortgages from a real reputable bank, not a
TV advertising reverse mortgage scammer?

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?

The amount that can be borrowed is based on how much you can pay. For her
that would probably be zero. Any mortgage money borrowed would most likely
cost more that it would earn on secure bonds. She should probably sell the
house to a family member and then rent back with a secure lease.

EXT wrote:
....
... She should probably
sell the house to a family member and then rent back with a secure lease.

Not w/o serious discussion w/ estate planner, etc., ...

If nothing else, the potential heir(s) lose basis step-up in that scenario.

This ain't the forum for such discussions, not just that it's off-topic
but that there's far too much at stake and too many personal details
required to make a rational decision that one should even consider
sharing in such a public forum.

--

"EXT" wrote in message
anews.com...
cost more that it would earn on secure bonds. She should probably sell the
house to a family member and then rent back with a secure lease.

I am not sure what legal way to do it, but it may be possiable to rent the
house to a family member for one month at the normal rental rate. This
turns the house into a rental property. Then she can give it to a family
member.
That is sort of what a lawyer explained it to me about one way we could have
done my dad's house when he went to the VA hospital.
There are many ways to protect the property if you talk to a lawyer.

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?

Simple answer to the question you didn't ask:

Go see an Estate Planning Attorney.

Not a Real Estate attorney that also does wills. Not a "Hurt In A Car?
Call William Mattar" guy that also "plans estates".

Go see a firm that specializes in Elder Care and Estate Planning.

The issues are bigger than just the fact that your sister needs some
cash. What if she has to go into a nursing home? "She's 81, not in the
best of health" The time to deal with this is not as she lying in the
hospital waiting for the ambulance ride to Hillcrest Haven. It's right
now.

But "Wait!" you say. "Attorneys cost money!"

Do you think an Attorney is going to cost you $500K? Well, that's what
it's going to cost if something happens to your sister and she ends up
in a nursing home and they take the house as payment. There may be
things that a good Estate Planning attorney can do, right now, to
avoid that. Even if it costs you (her) something, it'll be way less
than losing the house. Don't be afraid of the "look-back" time frames
and say it's too late. You'll never really know the answer to that
question until you talk to someone who deals with these matter on a
daily basis.

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.

In article ,
Van Chocstraw wrote:

The best thing is to get a power of attorney and sell her property,
invest the money and let her live with you until it becomes unbearable.
Then put her in a home.

I hope to hell that if I'm 81 and become "unbearable" to my relatives,
they'll have the good sense to drown me in the pool.

On Aug 10, 2:43*pm, Van Chocstraw
wrote:
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?

You can get a reverse mortgage with a lump sum payment and monthly
payments. Invest the lump sum.

The best thing is to get a power of attorney and sell her property,
invest the money and let her live with you until it becomes unbearable.
Then put her in a home. Hopefully by then the profit from investment has
increased her worth since it's $60,000 a year to stay in a nursing home.- Hide quoted text -

- Show quoted text -

"since it's $60,000 a year to stay in a nursing home"

$60K would be nice! It's at least $110K where I live, and I'm not
talking NYC or LA.

$60K? Do they feed you?

Van Chocstraw wrote:
....
The best thing is to get a power of attorney and sell her property, ...

There's absolutely _no_way_ this can be determined to be "the best
thing" from the almost complete lack of knowledge in the specific
situation...

--

I would suggest going to this website as a starting point:

http://elderlawanswers.com

You can probably also find an experienced elderlaw attorney in your area
through the website.

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?

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.

On Mon, 10 Aug 2009 10:06:00 -0400, "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?


This is a foolish investment because of the risk, even with the safest
AAA-rated bonds. One should not use home equity for investments.
Your sister's best bet is to get the reverse mortgage or sell the
house, but it should be her choice.

If she sells, then use part of the money to buy a AAA-rated low-cost
bond fund such as Vanguard Ginnie Mae. It's kind of expensive right
now, due to what happened to Fannie and Freddie, but the price
fluctuates between $9.50 and $10.50, pays (taxable) monthy dividends.
With the other half I'd recommend laddering CDs with half the money,
making sure they are government guaranteed. No need for an ETF,
unless you want your broker to steal a profit.

"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?

There are so many possible problems with nursing homes, inheritance taxes,
gift taxes and so forth, it is impossible to get a good answer from a bunch
of newsgroup junkies. See a good estate planner that does this every day.
The lawyer will save, not cost, you money.

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.

Some more guidance:

http://en.wikipedia.org/wiki/Reverse_mortgage

--
Walter
www.rationality.net
-
"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?

"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.

on 8/10/09 9:06 AM Ray said the following:
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?

Sell the house and rent it back?

On 12 Aug 2009 03:58:46 GMT, FlavorFlav
wrote:


There was a report on scammer-types about reverse mortgages. It was a
while ago, don't remember much about it. Just to beware and make sure
you know what you're getting in to.
One thing I remember is somehow the customers wound up having to pay back
the company more than what they received from the "reverse". Beware and
deal with a well known company.

Well, of course; that's the interest. With a standard mortgage you
pay much more than you borrowed also. The big difference is that with
a standard mortgage you get a lump sum up front and then pay it back
bit by bit over time; with a reverse mortgage you get the money bit by
bit over time and then pay it back in a lump sum at the end.

There are other differences, of course, like whether you can continue
to get payments (i.e. borrow more money) during your lifetime even if
it ends up with negative equity, whether that negative equity has to
be paid in addition on sale, what the payback terms are, etc.

It's important to analyze the money flow to determine the interest
rate and fee structure; yes, many scammers sell reverse mortgages that
are very very costly in the end.

Josh

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?

Its unlikely any bank would make a mortgage of any size to an (UNEMPLOYED)
81 year old in poor health.
She would have to show enough income to make the LARGE monthly payments on
the amount you suggest.