Home equity
Reverse mortgage
A loan for homeowners 62 and older that converts home equity into cash with no monthly payment, repaid when the borrower sells, moves out, or passes away.
What does reverse mortgage mean?
The most common reverse mortgage is a HECM, insured by the FHA. Instead of you paying the lender, the lender pays you — as a lump sum, monthly income, or line of credit — and the balance grows over time.
You keep the title and can never owe more than the home is worth. Federal rules require HUD-approved counseling before you can take one.
Why it matters
For a Michigan homeowner 62 or older who is house-rich but cash-tight, a reverse mortgage converts equity into income without a monthly loan payment. That can ease a fixed-income budget in retirement.
The trade-off is a growing balance that reduces what heirs inherit, plus the ongoing duty to keep taxes and insurance current. Miss those and you risk default even with no loan payment due.
Common questions
Who can get a reverse mortgage?
Homeowners 62 and older with significant equity in a primary residence, after completing required HUD-approved counseling. The most common type is the FHA-insured HECM.
Do I still pay property taxes on a reverse mortgage?
Yes — and it's critical in Michigan. You remain responsible for taxes, insurance, and upkeep, and falling behind is the leading cause of reverse-mortgage default here.
Will my heirs owe money?
They can never owe more than the home is worth — it's non-recourse. But the growing balance reduces the equity they inherit, since the home is typically sold to repay the loan.
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