Reverse Mortgages in the Midwest

From the Buckeye State to the epic hills of North Dakota, the Midwestern region of the United States is truly “America’s Heartland.” The Midwest region consists of Ohio, Michigan, Indiana, Illinois, Wisconsin, Minnesota, Iowa, Missouri, Kansas, Nebraska, South Dakota, and North Dakota.

With sights and landmarks including the Great Lakes, St. Louis’ gateway to the West, large cities and metropolitan areas like Chicago and Detroit, and Mt. Rushmore and the infamous Badlands, the Midwest region is situated in the center of some of the country’s most iconic landscapes and vast patchwork of cities and small towns. In fact, the region accounts for just north of 20% of the nation’s total population. With over 68 million Americans calling the Midwest home1, the region is popular amongst residents of all age groups – including the retired crowd.

State/TerritoryTotal PopulationPercentage of population ages 65+
North Dakota774,94815.7%
Indiana6,805,98516.1%
Illinois12,671,46916.1%
Nebraska1,963,69216.2%
Kansas2,943,58216.3%
Minnesota5,707,39016.3%
South Dakota895,37617.2%
Missouri6,168,18717.3%
Iowa3,193,07917.5%
Wisconsin5,895,90817.5%
Ohio11,780,01717.5%
Michigan10,050,81117.7%
 Total = 68,841,444Average = 16.8%

Data: U.S. Census Bureau

With an affordable cost of living, beautiful scenery, an abundance of activities, and just overall, friendly people, the Midwest has become a popular retirement haven. In fact, a MoneyRates.com survey identified Iowa and Missouri as 2 of the top 10 states to retire in2 for 2022. With this in mind, it’s no surprise that the Midwest’s large population of seniors makes up 16.8% of the regions total population1. This is the third largest in the nation just behind the Southeast and Northeast.

As the “aging in place” movement continues to gain momentum across all regions, many Midwestern retirees are choosing to stay in their homes well into advanced retirement years. But in order to be conducive for advanced aging, homes often require some modifications and updates in terms of safety, accessibility, and overall convenience. And for retirees adjusting to a limited or fixed income in the Midwest, these expenses could pose a financial burden. Fortunately, they don’t have to. For many seniors, there is an untapped source of wealth that can provide additional cash flow to fund these modifications and more. So where is this wealth? Look no further than your home…

Home Equity in the Midwest
With senior homeowners ages 62 and older now accounting for $10.6 trillion in home equity3, you may be surprised to find just how much equity may be available in your home. What’s more, home equity represents two-thirds of total wealth for the average 65-year-old couple4. Tapping into this equity with a Home Equity Conversion Mortgage (HECM) – also known as a reverse mortgage – allows homeowners ages 62 and older to convert a portion of this equity into cash5 to supplement retirement income. With a reverse mortgage, you can continue to live out your golden years in the house you’ve come to love as your home – while maintaining full title and ownership. And here’s the best part: with no monthly mortgage payments required6, you can free up even more cash every month – an average of $1,377 in the Midwest7.

Can I Get a Reverse Mortgage in the Midwest?
As long as you are at least 62 years of age and have sufficient equity in your home, the answer is YES. Reverse mortgages are available to homeowners in Ohio, Michigan, Indiana, Illinois, Wisconsin, Minnesota, Iowa, Missouri, Kansas, Nebraska, South Dakota, and North Dakota.

How Much Money Can Retirees in the Midwest Get with a Reverse Mortgage?
The short answer here is “it depends.” The “principal limit” or amount of proceeds you can access with a reverse mortgage accounts for several variables including the type of loan, current interest rates, your age, and perhaps most notably – your home value. And even for those in the Midwest where home values are among some of the lowest in the nation, you may be surprised to find out just how much equity you’ve built up in your home.

Average Home Values: 2022
Iowa $184,972
Kansas $199,843
Ohio $202,341
Indiana $212,953
Missouri $221,446
Michigan $228,120
Nebraska $233,006
Wisconsin $254,680
Illinois $256,010
North Dakota $268,918
South Dakota $282,226
Minnesota $326,359
  Average = $239,243

Zillow Home Value Index, Data as of March 2022

How Retirees in the Midwest Can Use Reverse Mortgage Funds
Built on a history of rural farming, strong family values, and delicious home cooking, when it comes to the Midwest, the old saying “there’s no place like home” rings especially true. From craftsman style bungalows to farmhouse style abodes with charming details, or even creative modern homes, the varieties of homes in the Midwest reflect the region’s diverse landscape. But as we age, so do our homes. And as previously mentioned, you may find that your dream home of 20, 30, or maybe even 40 years ago could use some TLC. Fortunately, reverse mortgage funds provide the financial means to turn your current home into a retirement haven for years to come, simply by taking on some proactive projects around the house. And that’s just one way to use money received from a reverse mortgage. Some other common use cases we see include:

  • Mitigating debt, bills, and credit card balances. After all, we can all benefit from some extra money each month to cover everyday costs!
  • Setting aside funds for healthcare expenses. According to Fidelity, the average 65-year-old couple now needing approximately $315,000 saved (after tax) for retirement healthcare-related expenses.
  • Establishing a line of credit that grows over time. Not only does this provide peace-of-mind, but it also helps ensure you’re prepared for unexpected expenses that may arise in the future.
  • Helping family members or loved ones. From weddings to a down payment on a home, or even college tuition – you can help offset these significant expenses using reverse mortgage funds.

When it comes to ways you can use your reverse mortgage proceeds, the possibilities are endless. Simply stated, the equity built up in your home belongs to you – and you can use your funds however you wish.

Compared to other financing alternatives, this flexibility is just one of the many benefits that make reverse mortgages a popular option. Often compared to a standard Home Equity Line of Credit (HELOC), a reverse mortgage has a comparable rate – in addition to stability that can’t be understated. While several banks and lenders were forced to freeze or suspend HELOC applications altogether in the early days of the COVID-19 pandemic, reverse mortgages remained available and unchanged. And for the Midwest region affected particularly hard by the pandemic, this staying power did not go unnoticed. Just check out how many reverse mortgage loans were closed in 2021 across each state9.

Reverse Mortgages in 2021
North Dakota25
South Dakota48
Nebraska118
Kansas133
Iowa134
Wisconsin227
Missouri320
Indiana375
Minnesota398
Michigan489
Illinois543
Ohio695
 Total = 3,505

Data: U.S. Department of Housing and Urban Development

Funding Your Retirement in the Midwest
Whether you’re a fan of laid-back living, an avid shopper, or a nature enthusiast – there are plenty of reasons to call the Midwest home as you settle into retirement years. And if you’re part of the 90% of seniors wishing to age in place and remain in your current home well into retirement10, a reverse mortgage may be a viable option.

At Longbridge Financial, our top goal is to give you peace of mind about your finances. That’s why we specialize exclusively in reverse mortgages and leveraging home equity to address the financial challenges that impact so many Americans. We’re committed to recommending the reverse mortgage program only after we are certain that the program is right for you and meets your needs. Our Loan Officers get to know you, your home, your goals, and your finances as we de discuss your options.

We’re also an FHA approved lender, with our loan program insured by the U.S. Department of Housing and Urban Development (HUD). We believe in doing the right thing and fully adhere and subscribe to the National Reverse Mortgage Lenders Association’s (NRMLA) Code of Ethics.

Ready to see what tapping into home equity can do for you? For information, fill out the form on this page for your free information kit – and contact the Longbridge team of experts today!

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