By Ken Powell · NMLS #2656628 · September 2026
You are 62 or older. You still have a mortgage payment every month, and between rising property assessments, homeowners insurance, and everyday costs, that payment is starting to feel heavier than it used to. You have heard the words “reverse mortgage” but you are not sure if it actually solves this problem or just adds a new one. Here is the straight answer, using real numbers from two Southern Maryland scenarios.
By Ken Powell, Reverse Mortgage Planner and Mortgage Loan Officer, NMLS #2656628 | Serving Calvert, Charles, St. Mary’s, and Prince George’s counties
The short answer: A Home Equity Conversion Mortgage (HECM), the FHA-insured reverse mortgage, can pay off your existing mortgage balance at closing using your home’s equity. Once that balance is paid off, you are no longer required to make a monthly principal and interest payment on your home. You are still responsible for property taxes, homeowners insurance, and basic upkeep, and for some homeowners, the loan can also set aside funds specifically to help cover those ongoing costs. It is available throughout Calvert County, Charles County, St. Mary’s County, and Prince George’s County.
What a Reverse Mortgage Actually Changes
A traditional mortgage runs in one direction: you borrow money, and you pay it back every month for years. A reverse mortgage runs the other way. Instead of you paying the lender each month, the loan pays off what you currently owe, and no further monthly principal and interest payment is required as long as you live in the home as your primary residence, keep your property taxes and insurance current, and maintain the property.
That single change, no required monthly mortgage payment, is the reason most homeowners look into this program in the first place. It does not erase property taxes, insurance, or HOA dues. Those bills still belong to you. What it removes is the mortgage payment itself, which for most homeowners is the largest single housing expense on the list.
Where the Money for Property Taxes and Insurance Comes From
There are two ways a HECM can help with taxes and insurance, and it matters which one applies to you:
- Freed-up cash flow. Once the required mortgage payment disappears, the money that used to go toward principal and interest each month is simply available for other bills, including property taxes and insurance, without touching savings or retirement accounts.
- A dedicated set-aside. In some cases, particularly where the financial assessment shows a homeowner’s income is a tighter fit for ongoing property charges, HUD requires or allows a Life Expectancy Set-Aside (LESA), a portion of the loan proceeds held back specifically to pay future property taxes and insurance on the homeowner’s behalf.
Which path applies depends on your income, credit history, and the required financial assessment every HECM borrower goes through. This is exactly the kind of detail worth running through with a loan officer before you assume either way.
Example 1: Prince Frederick, MD
Margaret, 74, owns her home in Prince Frederick outright except for a small remaining mortgage balance of $85,000. Her home is worth $475,000. Her monthly mortgage payment is $610, and between a fixed county pension and Social Security, that payment has become harder to justify every month, especially with property assessments and insurance premiums both climbing over the last two years.
| Item | Before | After HECM |
|---|---|---|
| Existing mortgage balance | $85,000 | Paid off at closing |
| Required monthly P&I payment | $610 | $0 |
| Property taxes, insurance, upkeep | Her responsibility | Still her responsibility |
| Remaining available equity | — | Held as a growing line of credit for future use |
Margaret uses a HECM to pay off the $85,000 balance and eliminate her $610 monthly payment entirely. The remaining equity in her home is available to her as a line of credit that grows over time, unused unless she needs it, which gives her a cushion for a future insurance premium increase or an unexpected repair.
Example 2: Waldorf, MD
Robert, 68, is still working part time and carries a mortgage balance of $190,000 on a home valued at $520,000 in Waldorf. His monthly payment of $1,340 competes directly with a fixed county tax bill and a homeowners insurance premium that both increased this year. He is not in danger of missing a payment, but the math feels tighter every year, and he would rather solve it now than wait for a harder year.
| Item | Before | After HECM |
|---|---|---|
| Existing mortgage balance | $190,000 | Paid off at closing |
| Required monthly P&I payment | $1,340 | $0 |
| Financial assessment result | — | Partial set-aside established for future property taxes and insurance |
| Annual cash flow freed up | — | Roughly $16,000 no longer owed to a lender each year |
Because Robert’s income is closer to the line, his financial assessment results in HUD requiring a partial set-aside from his loan proceeds, money held specifically to pay future property tax and insurance bills on his behalf. Between the eliminated mortgage payment and the set-aside, Robert has effectively removed his two biggest recurring housing worries in a single transaction.
These scenarios are for illustration purposes only. Every borrower’s numbers, loan amount, and qualification will differ based on age, home value, interest rates, and program guidelines at the time of application.
Who This Is Genuinely a Fit For
- Homeowners age 62 or older still carrying a mortgage payment
- Homeowners whose property tax or insurance bills have grown faster than their income
- Homeowners who plan to stay in their current home long term
- Homeowners who want to keep more monthly cash flow without drawing down retirement accounts
Who Should Think Twice
- Homeowners planning to move within the next few years, since upfront costs are meaningful and the loan works best over a longer horizon
- Homeowners who are not confident they can keep up with property taxes, insurance, and maintenance going forward, since falling behind on those can make the loan due and payable
- Homeowners whose heirs are counting on the home passing to them with no lien attached
Frequently Asked Questions
Will a reverse mortgage really eliminate my mortgage payment?
Yes. If you have an existing mortgage balance, a HECM reverse mortgage pays it off at closing using your home’s equity. From that point forward, no monthly principal and interest payment is required as long as you live in the home as your primary residence and stay current on property taxes, homeowners insurance, and basic maintenance.
Does a reverse mortgage pay my property taxes and insurance for me?
Not automatically. You remain responsible for property taxes, homeowners insurance, and upkeep. However, depending on your required financial assessment, HUD may set aside a portion of your loan proceeds specifically to cover future property tax and insurance payments on your behalf, and the cash flow freed up by no longer having a mortgage payment can also be used toward those costs.
What is the minimum age to qualify for a HECM?
The youngest borrower on the loan must be at least 62 years old.
What happens if I fall behind on property taxes or insurance after getting a reverse mortgage?
Falling behind on property taxes, homeowners insurance, or required home maintenance can make the loan due and payable. This is why the set-aside option exists for borrowers whose financial assessment suggests it would help, and it is also why an honest conversation about your budget matters before you apply, not after.
Can I use a reverse mortgage anywhere in Southern Maryland?
Yes. This includes Calvert County towns like Prince Frederick, Lusby, and Huntingtown, Charles County towns like Waldorf and La Plata, St. Mary’s County towns like Leonardtown and California, and Prince George’s County.
What happens to the loan when I sell the home or pass away?
The loan becomes due when the home is no longer the borrower’s primary residence, typically through sale, moving out permanently, or passing away. The home is generally sold, the loan balance is paid off from the proceeds, and any remaining equity belongs to the borrower or their heirs. If the sale does not cover the full balance, neither the borrower nor their heirs owe the difference, since HECM loans are non-recourse.
Do I need to go through counseling before I can apply?
Yes. Every HECM borrower is required to complete a counseling session with a HUD-approved housing counseling agency before applying, so you understand the full picture before committing to anything.
Why Work With a Local Loan Officer for This Decision
Whether a reverse mortgage should eliminate your payment outright, cover a portion of your property taxes through a set-aside, or is not the right fit at all depends entirely on your specific income, your home’s value, and your financial assessment results. That is not a decision to make from a national ad or a call center script.
I am Ken Powell, a Navy veteran and mortgage adviser based in La Plata, serving homeowners throughout Calvert, Charles, St. Mary’s, and Prince George’s counties. I specialize in the loans that require more thought: reverse mortgages, DSCR and investor loans, and self-employed borrower programs using bank statements, P&L, or asset-based qualification. My job is to walk through your actual numbers with you, not just get you to a closing table.
If you are carrying a mortgage payment into retirement and want to know exactly what a reverse mortgage would and would not change for your situation, let’s run your numbers together.
Book a call with Ken · Call or text (240) 237-7855 · Request a scenario review
Sources
- U.S. Department of Housing and Urban Development, HECM program requirements at 24 CFR Part 206
- U.S. Department of Housing and Urban Development, Life Expectancy Set-Aside (LESA) and Financial Assessment guidance
- Consumer Financial Protection Bureau, guidance on reverse mortgage loan structures and borrower obligations
Ken Powell | Mortgage Loan Officer | NMLS #2656628 | Fairway Independent Mortgage Corporation d/b/a Fairway Home Mortgage | NMLS #2289 | NMLS Consumer Access | Equal Housing Lender.
Reverse mortgage borrowers are required to obtain an eligibility certificate by receiving counseling sessions with a HUD-approved agency. The youngest borrower must be at least 62 years old. Borrowers remain responsible for payment of property taxes, homeowners insurance, and property maintenance. Failure to meet these obligations may result in the loan becoming due and payable. Monthly reverse mortgage advances may affect eligibility for some other programs. This material has not been reviewed, approved, or issued by HUD, FHA, or any government agency. The company is not affiliated with or acting on behalf of or at the direction of HUD, FHA, or any other government agency.
The examples in this article are illustrations only. They use assumed values, balances, and rounded figures, and do not reflect any actual transaction, quote, or offer of credit. Actual costs, terms, and outcomes vary. This article is provided for educational purposes and is not legal, tax, or financial advice. Consult your own attorney, tax professional, and a HUD-approved housing counselor regarding your specific situation.
About the Author
Ken Powell · Mortgage Loan Officer, Fairway Home Mortgage · NMLS #2656628 · La Plata, MD
Ken is a retired U.S. Navy veteran, a former Realtor with more than 10 years and $22M+ in closed sales, and a real estate investor since 2014. He specializes in reverse mortgage, VA, DSCR, and self-employed financing across Maryland and Virginia. Learn more →
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