"I am interested in your opinion of the following plan: Take a HECM reverse mortgage on my home, which is worth $1,000,000 and will appreciate by 3.5 percent a year. I would draw on the HECM for cash to invest or monthly income, then sell the house after 12 years, repaying the HECM from the house appreciation."
Your letter points up the potential use of HECM reverse mortgages for a limited period, though with multiple possible purposes. You don't say how old you are so I am going to assume you are 62, the minimum age to qualify for a HECM. If you are older, the draw amounts I refer to below will be understated.
You should also be aware that the amounts you can draw on a HECM are no greater with a house worth $1 million than with one worth $679, 650. This is the FHA maximum claim amount, which caps how much you can draw. It is adjusted every year.