It wasn’t very long ago when reverse mortgages brandished a reputation as being a high cost, high risk solution of last resort for retirees in Michigan need of income. Today, with revamped rules that lower both their cost and their risk, reverse mortgages have found legitimacy as a viable planning tool. While they are still can be a more expensive form of equity financing, they offer retirees more options with greater flexibility than other loan products. If you’re one of the thousands of people looking into a reverse mortgage, here is what you need to know about getting one.
Want to learn more? Click here to get free information about a reverse mortgage!
Know What Type You Need
There are three types of reverse mortgages from which to choose:
- The most popular is an HECM (Home Equity Conversion Mortgage), which is insured by the Federal Housing Administration (FHA). There are non-HECM reverse mortgages available, but they don’t have the same consumer protections as HECMs. The lending limit for federally insured HECMs is $625,000.
- If you’re home is worth more than $625,000, you would need to apply for a proprietary reverse mortgage, also called a jumbo reverse mortgage.
- The third type is a single-purpose reverse mortgage which is available through certain local government and nonprofit organizations to assist older homeowners in covering the costs of repairs or to pay property taxes.
Know How to Qualify for a HECM in MI
To qualify for a federally insured HECM, you have to meet certain FHA requirements, including:
- You are at least 62 years old
- You live in the home as your primary residence. If you are married, your spouse must also live in the home whether or not she is named on the loan.
- You are not behind on any federal debts
- You own your home outright or have a significant amount of equity in it
- Your home meets FHA property standards and flood requirements
- You attend a required HECM counseling session
Know Your Payment Options in Michigan
With an HECM, you have several options for how to receive your payment. This far into the process, you should know the purpose for getting a reverse mortgage – supplementing your income, buying another home, home improvements, etc. – so you should know which payment option would serve you best. Generally, there are three options available to you: Monthly payments, which can be set for as long as you live in your house or for a fixed period of time; a one-time lump sum; or a line of credit. With a line of credit, the lender approves a maximum credit limit from which you can draw funds as you need them. Unlike the other options, you can pay back a line of credit to replenish your limit.
The Reverse Mortgage Financial Assessment
Once you submit a HECM application, the lender will complete a financial assessment. The primary reason for the assessment is to ensure you have the ability to pay your property taxes and homeowners insurance on time. Failure to make these payments is cited as the number one reason why reverse mortgage borrowers have lost their homes to foreclosure. The lender will set aside a portion of your loan proceeds to cover these obligations on an ongoing basis.
Waiting to Close
As with any type of mortgage, the time it takes to close on them varies from lender to lender, but most will come in around 30 days. The holdup in most cases is the appraisal which can be slowed by a high demand for appraisers in your area.
Getting the right reverse mortgage for your needs takes a little time, so you don’t want to hurry the process. Do your due diligence. If you have any questions or concerns along the way contact a HUD-approved counselor for guidance.
Top Michigan Reverse Mortgage Companies
You want a HECM lender that you can rely on. Though these are not recommendations, we’ve compiled a list of the largest lenders in the state. Prior to 2012, this was mostly large banks that you’ve probably heard of, like Wells Fargo. Since 2012, the list is dominated by more specialized mortgage bankers who typically focus on the HECM product exclusively.
All Time
| Lender | Loans | Total Principal Limit |
| FINANCIAL FREEDOM SENIOR FUNDING CORP | 2,855 | 282,494,561 |
| WELLS FARGO | 2,715 | 386,838,513 |
| AMERICAN ADVISORS GROUP | 2,405 | 475,250,600 |
| ONE REVERSE MORTGAGE LLC | 1,610 | 262,419,840 |
| FIRST FINANCIAL MORTGAGE CORP | 1,249 | 194,780,325 |
| SENIORS EQUITY INCOME INC | 1,023 | 120,140,006 |
| UNITY MORTGAGE CORP | 704 | 57,894,892 |
| SUCCESS MORTGAGE PARTNERS INC | 700 | 129,694,680 |
| COLONIAL MORTGAGE CORP | 677 | 89,157,105 |
| WORLD ALLIANCE FINANCIAL CORP. | 579 | 78,235,612 |
| CENTURION MORTGAGE CORPORATION | 535 | 71,784,476 |
| FINANCE OF AMERICA REVERSE LLC | 535 | 110,627,307 |
| PARK PLACE MORTGAGE CORP | 377 | 37,926,513 |
| SECURITY MORTGAGE CORPORATION | 359 | 68,809,092 |
| BEST MORTGAGE SERVICES LLC | 345 | 32,603,544 |
| FIRST ALLIANCE MORTGAGE CO | 314 | 35,660,260 |
| REMINGTON MORTGAGE INC | 303 | 26,261,500 |
| VAN DYK MORTGAGE CORPORATION | 300 | 41,108,292 |
| U.S. FINANCIAL MORTGAGE CORPORATION | 281 | 26,153,800 |
| METLIFE BANK NATIONAL ASSOCIATION | 274 | 46,550,510 |
Since 2012
| Lender | Loans | Total Principal Limit |
| AMERICAN ADVISORS GROUP | 2,401 | 474,803,100 |
| ONE REVERSE MORTGAGE LLC | 1,120 | 194,041,740 |
| FINANCE OF AMERICA REVERSE LLC | 348 | 88,514,857 |
| SUCCESS MORTGAGE PARTNERS INC | 300 | 63,367,400 |
| LIBERTY HOME EQUITY SOLUTIONS INC | 222 | 34,801,000 |
| MUTUAL OF OMAHA MORTGAGE INC. | 207 | 56,419,075 |
| LONGBRIDGE FINANCIAL LLC | 194 | 56,013,588 |
| PROFICIO MORTGAGE VENTURES LLC | 133 | 22,421,138 |
| SECURITY MORTGAGE CORPORATION | 127 | 27,767,734 |
| LIVE WELL FINANCIAL INC | 111 | 20,549,300 |
Want to learn more? Click here to get free information about a reverse mortgage!
Interest Rates
Based on monthly data from HUD, we’ve calculated the average interest rates for each month:
Current Rates
| Date | Fixed Rate | Adjustable Rate |
| 2019-01-01 | NA | 5.26% |
| 2019-02-01 | 4.56% | 5.26% |
| 2019-03-01 | NA | 5.02% |
| 2019-04-01 | NA | 5.06% |
| 2019-05-01 | 4.50% | 4.83% |
| 2019-06-01 | NA | 4.93% |
| 2019-07-01 | NA | 4.90% |
| 2019-08-01 | NA | 4.38% |
| 2019-09-01 | NA | 4.55% |
| 2019-10-01 | NA | 4.53% |
| 2019-11-01 | 5.31% | 4.30% |
| 2019-12-01 | 3.75% | 4.24% |
| 2020-01-01 | 4.56% | 4.43% |
| 2020-02-01 | NA | 4.21% |
| 2020-03-01 | NA | 4.15% |
| 2020-04-01 | NA | 3.93% |
| 2020-05-01 | NA | 3.84% |
| 2020-06-01 | NA | 3.46% |
| 2020-07-01 | NA | 3.31% |
| 2020-08-01 | NA | 3.43% |
| 2020-09-01 | NA | 3.30% |
| 2020-10-01 | 3.81% | 2.95% |
| 2020-11-01 | 3.62% | 3.02% |
| 2020-12-01 | NA | 3.02% |
| 2021-01-01 | 4.81% | 2.91% |
| 2021-02-01 | 3.37% | 2.91% |
| 2021-03-01 | 3.37% | 2.64% |
| 2021-04-01 | NA | 2.57% |
| 2021-05-01 | 3.43% | 2.56% |
| 2021-06-01 | 3.31% | 2.26% |
| 2021-07-01 | NA | 2.33% |
| 2021-08-01 | 3.43% | 2.30% |
| 2021-09-01 | 3.25% | 2.39% |
| 2021-10-01 | 3.38% | 2.36% |
| 2021-11-01 | 3.37% | 2.31% |
| 2021-12-01 | 4.18% | 2.35% |
| 2022-01-01 | 3.31% | 2.55% |
| 2022-02-01 | 3.48% | 2.58% |
| 2022-03-01 | 3.06% | 2.95% |
| 2022-05-01 | 4.37% | 3.97% |
| 2022-04-01 | 3.18% | 3.49% |
| 2022-06-01 | 3.31% | 4.11% |
| 2022-07-01 | 4.43% | 4.71% |
| 2022-08-01 | NA | 5.15% |
| 2022-09-01 | NA | 5.75% |
| 2022-10-01 | 5.93% | 6.23% |
| 2022-11-01 | NA | 6.66% |
| 2022-12-01 | 5.81% | 7.15% |
| 2023-01-01 | NA | 7.02% |
| 2023-02-01 | NA | 7.27% |
| 2023-03-01 | NA | 7.41% |
| 2023-04-01 | NA | 7.12% |
| 2023-05-01 | NA | 6.87% |
| 2023-06-01 | NA | 7.27% |
| 2023-07-01 | NA | 7.39% |
| 2023-08-01 | NA | 7.70% |
| 2023-09-01 | NA | 7.65% |
| 2023-10-01 | NA | 7.55% |
| 2023-11-01 | NA | 7.65% |
| 2023-12-01 | NA | 7.63% |
| 2024-01-01 | NA | 7.66% |
| 2024-02-01 | NA | 7.34% |
| 2024-03-01 | 7.56% | 7.32% |
| 2024-04-01 | NA | 7.54% |
| 2024-05-01 | NA | 7.46% |
| 2024-06-01 | NA | 7.60% |
| 2024-07-01 | NA | 7.50% |
| 2024-08-01 | NA | 7.28% |
| 2024-09-01 | NA | 6.84% |
Historic Rates
| Date | Fixed Rate | Adjustable Rate |
| 2016-01-01 | 4.78% | 3.54% |
| 2016-02-01 | 5.04% | 3.70% |
| 2016-03-01 | 5.06% | 3.81% |
| 2016-04-01 | 5.06% | 3.92% |
| 2016-05-01 | 5.02% | 4.05% |
| 2016-06-01 | 5.06% | 4.12% |
| 2016-07-01 | 5.04% | 4.21% |
| 2016-08-01 | 5.06% | 4.14% |
| 2016-09-01 | 5.05% | 4.37% |
| 2016-10-01 | 5.02% | 4.58% |
| 2016-11-01 | 5.06% | 4.66% |
| 2016-12-01 | 5.06% | 4.71% |
| 2017-01-01 | 5.06% | 4.80% |
| 2017-02-01 | 4.96% | 4.75% |
| 2017-03-01 | 4.92% | 4.59% |
| 2017-04-01 | 5.05% | 4.52% |
| 2017-05-01 | 5.05% | 4.44% |
| 2017-06-01 | 5.04% | 4.35% |
| 2017-07-01 | 5.05% | 4.40% |
| 2017-08-01 | 5.06% | 4.48% |
| 2017-09-01 | 5.06% | 4.47% |
| 2017-10-01 | 5.02% | 4.49% |
| 2017-11-01 | 5.01% | 4.63% |
| 2017-12-01 | 5.06% | 4.68% |
| 2018-01-01 | 5.06% | 4.65% |
| 2018-02-01 | 4.94% | 4.74% |
| 2018-03-01 | 4.78% | 4.66% |
| 2018-04-01 | 4.89% | 4.80% |
| 2018-05-01 | 4.69% | 4.86% |
| 2018-06-01 | 5.06% | 4.80% |
| 2018-07-01 | 4.88% | 4.76% |
| 2018-08-01 | 4.57% | 4.91% |
| 2018-09-01 | 5.24% | 4.95% |
| 2018-10-01 | 4.70% | 4.91% |
| 2018-11-01 | 4.77% | 5.05% |
| 2018-12-01 | 4.95% | 5.10% |
Leading Cities in MI by HECM Loans Originated
As you might expect, Detroit leads other cities in Michigan by a large margin with over 5000 reverse mortgages originated since the program began in the 1980s.
| Rank | City | Zip | Total |
| 1 | DETROIT | 48221 | 613 |
| 2 | DETROIT | 48235 | 556 |
| 3 | DETROIT | 48227 | 433 |
| 4 | DETROIT | 48204 | 392 |
| 5 | DETROIT | 48238 | 371 |
| 6 | DETROIT | 48219 | 314 |
| 7 | DETROIT | 48206 | 294 |
| 8 | DETROIT | 48234 | 272 |
| 9 | DETROIT | 48213 | 235 |
| 10 | DETROIT | 48214 | 204 |
| 11 | INKSTER | 48141 | 199 |
| 12 | TAYLOR | 48180 | 191 |
| 13 | DETROIT | 48228 | 190 |
| 14 | DETROIT | 48224 | 183 |
| 15 | OAK PARK | 48237 | 167 |
| 16 | FLINT | 48505 | 166 |
| 17 | SOUTHFIELD | 48075 | 143 |
| 18 | WESTLAND | 48185 | 139 |
| 19 | LIVONIA | 48154 | 135 |
| 20 | ROSEVILLE | 48066 | 131 |
| 21 | DETROIT | 48203 | 129 |
| 22 | DETROIT | 48210 | 129 |
| 23 | DETROIT | 48202 | 126 |
| 24 | DETROIT | 48205 | 126 |
| 25 | ROYAL OAK | 48073 | 125 |
| 26 | DETROIT | 48217 | 121 |
| 27 | TRAVERSE CITY | 49686 | 121 |
| 28 | ANN ARBOR | 48103 | 113 |
| 29 | NILES | 49120 | 112 |
| 30 | FLINT | 48504 | 111 |
Housing Counselors
BRIDGING COMMUNITIES, INC.
6900 MCGRAW STREET, DETROIT MI 48210
(313) 361-6377
BridgingCommunities.org
CENTER FOR FINANCIAL HEALTH
600 W MAPLE ST, LANSING MI 48906-5093
(517) 708-2550
http://www.centerforfinancialhealth.org
GREENPATH FINANCIAL WELLNESS
2055 SPRING ARBOR RD, JACKSON MI 49203-2705
(888) 860-4167
http://www.greenpath.com
GREENPATH FINANCIAL WELLNESS
44978 FORD RD SUITE C, CANTON MI 48187-5086
(888) 860-4167
GREENPATH FINANCIAL WELLNESS
27780 NOVI RD SUITE 105, NOVI MI 48377-3401
(888) 860-4167
GREENPATH FINANCIAL WELLNESS
271 WOODLAND PASS SUITE 125, EAST LANSING MI 48823-2060
(888) 860-4167
GREENPATH FINANCIAL WELLNESS
3501 LAKE EASTBROOK BLVD SE SUITE 222, GRAND RAPIDS MI 49546-5938
(888) 860-4167
GREENPATH FINANCIAL WELLNESS
131 COLUMBIA AVE E SUITE 112, BATTLE CREEK MI 49015-3788
(888) 860-4167
GREENPATH FINANCIAL WELLNESS
3210 RACQUET CLUB DR SUITE A, TRAVERSE CITY MI 49684-4704
(888) 860-4167
GREENPATH, INC.
36500 CORPORATE DRIVE, FARMINGTON HILLS MI 48331-3553
(888) 860-4167
OAKLAND COUNTY HOUSING COUNSELING
250 ELIZABETH LAKE RD STE 1900, PONTIAC MI 48341-1035
(248) 858-1189
http://www.oakgov.com/chi
Want to learn more? Click here to get free information about a reverse mortgage!
