The Best Reverse Mortgage Lenders of 2024

Government regulation of reverse mortgage lending has evolved significantly over the last three to ten years. Where lenders and brokers once had the freedom to exploit these products, the Federal Housing Administration and other government entities have been working to maintain the original intent of the reverse mortgage, which was to help retirees find the resources they need to comfortably fund retirement. Reverse mortgages can function as tools for debt consolidation, mortgage repayment, home repair funding or whatever the borrower desires, and while they can come with significant costs and fees, reverse mortgages can help borrowers maintain more liquidity of their assets.

The most commonly used form of reverse mortgage, the Home Equity Conversion Mortgage (HECM), is regulated, insured, and structured by the FHA. These products allow people 62 and older to fund their needs without making monthly loan payments. Instead, a reverse mortgage is an advance against the eventual sale of a current primary residence. A borrower’s home is used as collateral for a reverse mortgage, just as it is with a traditional forward mortgage, but the homeowner is never required to consign the title of their home and the loan is typically repaid when the home is sold at the end of the loan’s term. 

The following lenders are our top nine picks for the best reverse mortgage lenders of 2022. Each of them has originated more loans this year than the vast majority of other lenders and each has maintained a positive reputation in reverse mortgage lending.

The 8 Best Reverse Mortgage Companies

All Reverse Mortgage, Inc.

All Reverse Mortgage, Inc. (aka ARLO) is an FHA (Federal Housing Administration) approved mortgage lender specializing in reverse mortgages. The company was assigned an A+ rating by the Better Business Bureau with a close-to-perfect average customer review score of 4.98 out of 5 stars and also has strong ratings on ConsumersAdvocate.org, Consumer Affairs, Yelp, and Google. It was even a finalist in both the 2020 and 2021 Torch Awards for Ethics.

With this strong leadership, All Reverse Mortgage, Inc. has become an A+ rated company by the Better Business Bureau with perfect 5-star reviews from customers. All Reverse Mortgage, Inc. has also been rated five stars on ConsumersAdvocate.org, Consumer Affairs, Yelp, and Google. It even was a finalist in the 2021 Torch Awards for Ethics.

In addition to functioning as a lender, All Reverse Mortgage, Inc. is a resource to inform clients, empowering them to make their own decisions, and its website is helpful and easy to navigate. Many resources that can help you while researching reverse mortgage options, including basics of reverse mortgages, mortgage program information, and lender information, are available from its navigation pane. It also has a “tools” section that contains several helpful resources, including a Reverse Mortgage Calculator and an updated page on current reverse mortgages rates.

Product Offered by All Reverse Mortgage, Inc.

Home Equity Conversion Mortgages from All Reverse Mortgage, Inc.

HECMs enable homeowners to borrow equity from their primary residence, providing cash to cover expenses without restrictions, such as senior care, medical care, or a grandchild’s college tuition. With multiple adjustable and fixed rate HECM loan options available from All Reverse Mortgage, Inc., prospective loanees can choose the option that makes the most sense for their financial needs. 

All Reverse Mortgage, Inc. HECMs offer: 

• $0 Monthly Payment Option
• No Minimum Credit Score
• No Minimum Reserves
• Non-recourse loan

Jumbo Reverse Mortgage from All Reverse Mortgage, Inc.

For those whose home’s value exceeds the HECM limit, jumbo reverse mortgages offer a higher payout for the loanee. All Reverse Mortgage, Inc offers two types of jumbo reverse mortgages: fixed-rate and adjustable-rate.  While the fixed-rate option is a single lump-sum disbursement, the adjustable-rate option has a flexible line of credit and a draw period of 10 years. 

All Reverse Mortgage Inc.’s Jumbo Reverse Mortgages offer:

• Supports home values up to $10 million
• $4,000,000 Lending Limit
• Lump-Sum Fixed Rate Payment Option

Pros and Cons of All Reverse Mortgage, Inc.

Why We Recommend All Reverse Mortgage, Inc.

• All Reverse Mortgage, Inc.’s founder has over 40 years of experience in the mortgage banking industry. 
• Rather than simply list its products, All Reverse Mortgage, Inc.’s website offers in-depth resources about reverse mortgages. 
• Having educational materials so easily accessible while shopping for a reverse mortgage can make the purchasing process much easier for customers.
• All Reverse Mortgage, Inc. offers a wide range of product types, with four different HECMs and two types of jumbo reverse mortgages. 
• The company also maintains an almost perfect score on the Better Business Bureau website and has won several ethics awards, validating that it operates in a trustworthy manner. 

What Customers Are Saying

All Reverse Mortgage, Inc. has an A+ rating with the Better Business Bureau, a score of 4.98/5 stars from 154 customer reviews, and zero customer complaints. The company has a similarly high score on Google reviews, with an average of 4.9/5 stars from over 290 consumer reviews. 

Reviewers frequently mention the high level of customer service provided and that the All Reverse Mortgage, Inc. loan teams help explain the loan process every step of the way. One such review states, “The entire process was seamless from my initial inquiry to the final closing. Their expertise in answering questions in laymans terms and their prompt responses stood out.” 

Even a reviewer who decided not to get a reverse mortgage loan had only positive things to say about the customer service representative and the help and education they provided. 

American Advisors Group (AAG)

American Advisors Group (AAG) is a top provider of HECM reverse mortgages and is the number one lender by volume in the United States. The company has also earned certification from the National Reverse Mortgage Lender’s Association for its high ethical standards. Boasting a 90 percent customer satisfaction rating from its surveyed clients, this long-standing lender has gained a reputation for stability and comprehensive customer service in both the reverse and forward mortgage markets. AAG’s ability to offer HECM reverse mortgages across the country is another company strength, though its private AAG Advantage Jumbo Loan is less widely available.

To find out if you qualify or for more information on AAG’s traditional HECM offerings, call (800) 224-9121 or visit them online at AAG.com. 

Products Offered by AAG

The AAG HomeSafe Mortgage

The AAG HomeSafe Mortgage is AAG’s privately offered reverse mortgage intended exclusively for owners of high-value homes. AAG offers three versions of this jumbo loan: HomeSafe Standard, HomeSafe LESA, and HomeSafe Select, and customers have the option of lump sum or line of credit payments depending on the version chosen.

The HomeSafe private reverse mortgage offers:

• Up to a $4M payout
• Elimination of mortgage payments
• Lump sum payouts 
• Fixed interest rates at signing (rates will not increase)
• No mortgage insurance premiums (MIPs) required
• Line of credit option for HomeSafe Select customers

Requirements to Qualify:

• Must be 60 years of age (62 in TX and UT)
• Must have all or most of your mortgage paid down
• Property must have a minimum $1 million value
• Must meet with an AAG counselor to apply
• Must undergo a financial and credit score assessment
• Property must be your primary residence

To reach a counselor at American Advisors Group, visit them online at AAG.com or call (800) 224-9121.

FHA-Insured Reverse Mortgages from American Advisors Group 

AAG is also a lender of traditional HECM reverse mortgages, which are regulated to have the same basic costs and structures no matter what lender you use. However, AAG has maintained a position as a top traditional reverse mortgage lender in the country since 2013, and is definitely one of our top picks to include in your comparison shopping.

AAG’s FHA-insured reverse mortgage loans include:

• Adjustable Rate HECMs
• Fixed Rate HECMs
• HECMs for Purchase

To learn more about the interest rates, fees, structures and benefits of FHA-secured reverse mortgages, scroll down to view our resource guide.

Pros and Cons of American Advisors Group

Why We Recommend AAG

• AAG is the largest reverse mortgage lender in the country and has maintained a reputation for stability over many years in the financial sector. 
• AAG is a member in good standing with the National Reverse Mortgage Lender’s Association, which is a testament to this lender’s ethical treatment of clients and their supportive customer service environment.
• AAG has an abundance of plain-spoken and high-quality articles available to consumers on their website. 
• AAG consistently offers all the facts to reverse mortgage shoppers who wish to weigh the risks and benefits of HECMs, and all information on the AAG site comes directly from highly reputable sources in lending. 
• Another point in this lender’s favor is their client satisfaction rating of 90 percent — a figure earned from clients that AAG surveyed in 2021.

What Customers Are Saying

This lender has an A- rating with the Better Business Bureau (BBB) and has received a 4.65-star rating from over 800 consumer reviews on the BBB website. Common themes in AAG’s reviews cite a high degree of professionalism as well as dedicated loan specialists who are there for clients at every step of the loan closing process. Ronald O. states that “during [the] whole initial process, things were handled professionally and efficiently.” Another satisfied customer was similarly impressed with dedicated AAG staff: “Associates at AAG are very professional to deal with and exemplary in their work on behalf of their customers!” 

Consumers on Trustpilot seemed to love AAG’s commitment to helping homeowners who are facing a potential move or financial hardship, giving the lender an overall score of four and a half out of five stars. One reviewer on Trustpilot stated that his “agent went far and above her required duties to help us at a bad time,” and another consumer was grateful to AAG for helping her and her husband stay in their home through their retirement: “Now that we don’t have a mortgage payment, we can live out the rest of our days in our own home.”

Liberty Reverse Mortgage

Liberty Reverse Mortgage services more reverse mortgages than the vast majority of other lenders and is an accessible, dependable and high-transparency option for middle-class families. Liberty is well-known for its impressive Iron Clad Guarantee, which covers overall costs, customer service, and the loan application and approval process. Liberty offers borrowers perks like $100 gift cards and $500 account credits if it cannot match a competitor’s costs or takes longer than 60 days to close a loan. Further, it ensures customers have the option to complete the entire sign-up process from home and will always have ongoing support from a dedicated group of specialists. 

Liberty Reverse Mortgage provides a range of informative articles about what to expect from its HECM application process and required HUD counseling sessions, along with multiple entries on how a reverse mortgage works. It even offers advice on how to choose the right lender for you, which is a big help to comparison shoppers who are still weighing their options. Liberty Reverse Mortgage is currently licensed in every state, but does not offer consumer-direct retail lending in New York or Hawaii .

Products Offered by Liberty Reverse Mortgage

The Liberty EquityIQ Mortgage

Liberty has a jumbo reverse mortgage option for owners of properties valued at a minimum amount of $250,000. This loan offers certain protections to eligible non-borrowing spouses as long as they meet certain requirements.

Liberty’s EquityIQ private reverse mortgage offers:

• Up to a $4 million lending limit
• Lump sum payments
• Available in 16 states

Requirements to Qualify:

• Must be 60 years of age (62 in TX and UT)
• Must have all or most of your mortgage paid down
• Property must have a minimum $250,000 value
• Must meet with a licensed counselor to apply
• Must undergo a financial and credit score assessment
• Property must be your primary residence
• Minimum FICO score of 640

FHA-Insured Reverse Mortgages from Liberty Reverse Mortgage

Liberty Reverse Mortgage is a lender of traditional HECM reverse mortgages, including HECMs for new home purchases as well as fixed and adjustable rate HECMs. 

Liberty Reverse Mortgage’s reverse mortgage options include:

• Adjustable Rate HECMs
• Fixed Rate HECMs
• HECMs for Purchase

To find out more about Liberty Home Equity Solutions’ customer service and guarantees, contact them at (866) 751-2606, or visit LibertyReverseMortgage.com and use the calculator tool to estimate your eligibility.

To learn more about the interest rates, fees, structures and benefits of FHA-secured HECM reverse mortgages, scroll down to view our resource guide.

Pros and Cons of Liberty Reverse Mortgage

Why We Recommend Liberty Reverse Mortgage

• Liberty Reverse Mortgage has grown quickly since its inception in 2013 and now services more reverse mortgages than many  other lenders and brokers. 
• Its president is currently an officer on the board of the NRMLA, which certifies member institutions across the country that uphold high ethical standards of customer service. 
• Liberty’s Iron Clad Guarantee offers price matching, high customer service standards, and a speedy application and closing process.

What Customers Are Saying

This lender has an A+ rating with the Better Business Bureau and is well-regarded in consumer reviews across multiple platforms. In their review on the Better Business Bureau website, Ray and Rebecca S. wrote that “By far one of our best decisions was going with this company and having the privilege of working with someone that was all about customer service from beginning to end.” 

Another customer described how Liberty’s focus on customers surpassed multiple other companies, writing ““We spoke with three companies, and our loan officer at Liberty, Chris, was very positive about it. He kept in touch with us all of the time and he nursed us along the whole thing. He was thorough and responsive. Anything that we asked, he was able to answer and we felt really comfortable with him.”  

Liberty Reverse Mortgage has received 4.1 stars on ConsumerAffairs.com from over 130 reviews. We noticed that multiple consumers positively rated Liberty based on customer support. Pamela of Land O’ Lakes, FL states that, “The representative … was wonderful. He got back with me with any questions and then he would check if everything was going okay. He was right on top of everything and I was very comfortable working with him.”

Finance of America Reverse

Finance of America Reverse (FAR) has maintained a reputation as a top lender since at least 2011, providing not just private reverse mortgages and HECMs but also a host of other financial instruments, from student loans to large commercial loans. The company has leveraged its experience in the financial sector to gain a keen understanding of what its clientele needs, as demonstrated by FAR’s comprehensive website.

Among other features, the FAR website provides users with an online personality quiz to help them understand their retirement personality type so they can more easily shop for their best options. Also of particular interest is the FAR reverse mortgage calculator, which can estimate likely loan payouts. Beyond the wealth of information it supplies online, FAR may also offer the best private reverse mortgage option. Its proprietary HomeSafe loans are tailored to the needs of customers with high-value properties and feature an industry-first Borrower Care concierge program.

Products Offered by Finance of America Reverse

The HomeSafe Private Reverse Mortgage

While Finance of America offers traditional HECMs in all 50 states, those who have higher-value homes and more equity to take advantage of can benefit from FAR’s privately offered (not FHA-insured) HomeSafe reverse mortgage. HomeSafe easily wins our pick for the most versatile private reverse mortgage, with lump sum, line of credit, and combination payout options.

The HomeSafe private reverse mortgage offers:

• Access to up to $4 million of equity
• Options for line-of-credit payouts
• No origination fees
• Competitive interest rates
• Little to no out-of-pocket cost (not applicable to Purchase reverses)

Requirements to qualify:

• Must be 55 years of age or older depending on the state.
• Must have substantial equity in the home (around 50%) 
• Property must be high value 
• Must meet with a licensed counselor to apply
• Must undergo a financial assessment and credit check
• Property must be your primary residence
• Applicants must be able to pay their housing expenses (no set-aside offered)

States where HomeSafe Standard is available:

To contact Finance of America and discuss your options, call (866) 615-1257 or contact them at FAR.com.

FHA-Insured Reverse Mortgages from Finance of America Reverse

FAR also offers traditional Home Equity Conversion Mortgages (HECMs) that are insured, structured and closely regulated by the federal government. These areavailable in all North American states. 

Finance of America Reverse HECM options include:

• Adjustable Rate HECMs
• Fixed Rate HECMs
• HECMs for Purchase

To learn more about the interest rates, fees, structures and benefits of FHA-secured HECM reverse mortgages, scroll down to view our resource guide.

Pros and Cons of Finance of America Reverse

Why We Recommend Finance of America Reverse

• FAR has a fast application and closing process and the ability to accommodate homeowners with home values both high and low. 
• FAR’s website demonstrates that the agents understand their clientele and can provide the kind of long-term support that wins lenders a certification with the NRMLA. 

What Customers Are Saying

This lender has an A+ rating with the Better Business Bureau and has thousands of positive consumer reviews across the web citing their dedication to customer service as a key reason to borrow with FAR. Finance of America Reverse currently has more than 200 consumer reviews on ConsumerAffairs.com, many citing FAR’s price match guarantee and competitive interest rates, as well as great customer service. Michael of Redmond, WA shared that, “The application and underwriting process at Finance of America took 30 days. I had a very professional loan officer who I worked with most of the time. He was friendly and answered all the questions that I had. They were easy to work with, professional and were very responsive to all of my questions.”

On other sites where FAR is reviewed, such as ConsumersAdvocate.com, current FAR clients have expressed their pleasure with Finance of America’s customer care environment and the speed with which they close and originate loans. Bob H. in San Jose, CA writes, “This was my second experience with Finance of America Reverse. I am glad to say that the second time was equally as pleasant as the first. Joe does an excellent job guiding through the process.” 

Similarly, another customer mentioned FAR’s easy and streamlined loan application process: “They were fast and did what they said they were gonna do. The process took about three weeks and it was easy to go through. My loan officer was super nice and answered my questions.”

Mutual of Omaha Reverse Mortgage

Mutual of Omaha Reverse Mortgage is a member of the National Reverse Mortgage Lenders Association, which requires lenders to uphold high ethical standards in order to earn their certification. The company is licensed in 48 states and offers both traditional HECM loans and proprietary reverse mortgages to its customers. While its website is pared down and simple, it manages to provide a page full of useful tools for mortgage shoppers. This page contains a list of calculators to help people who are considering an array of retirement scenarios better understand how certain financial strategies might affect them on a realistic level. 

The Mutual of Omaha Reverse Mortgage “Retirement Projections” tool allows consumers to determine how taking monthly payments from a HECM would fit into their overall financial picture, and accounts for users’ Social Security income, retirement nest egg, annual savings, and other metrics. Users of the Mutual of Omaha Reverse Mortgage website will also find tools to estimate their monthly Social Security benefits and to calculate the likely returns of various HECM products, such as an HECM for purchase.

Products Offered by Mutual of Omaha Reverse Mortgage

FHA-Insured Reverse Mortgages from Mutual of Omaha

The HomeSafe Private Reverse Mortgage

Mutual of Omaha Reverse Mortgage gives customers with high-value properties the option of taking out a HomeSafe jumbo loan that can provide them with funds of up to $4 million.

The HomeSafe Reverse Mortgage offers:

• Loan limits of up to $4 million
• Flexible payouts with lump sum or monthly disbursement options
• No required mortgage insurance premiums
• Tax-free proceeds with a competitive fixed interest rate

Requirements to qualify:

• Available to homeowners age 62 and older
• Must have all or most of your mortgage paid down
• Property must be a home valued over $850,000 or a condo valued over $500,000
• Must meet with a licensed counselor to apply
• Must undergo a financial assessment and credit check
• Property must be your primary residence

FHA-Insured Reverse Mortgages from Mutual of Omaha Reverse Mortgage

Mutual of Omaha Reverse Mortgage is an FHA-approved lender of government-backed HECM reverse mortgages, including adjustable and fixed rate HECMs as well as HECMs for new home purchases. Due to both its NRMLA certification and the strong reputation of Mutual of Omaha Bank, borrowing with this lender is a great option.

Mutual of Omaha Reverse Mortgage HECM options include:

• Adjustable Rate HECMs
• Fixed Rate HECMs
• HECMs for Purchase

To talk about your options with a licensed specialist at Mutual of Omaha Reverse, call (877) 971-6784 or contact them online at mutualreverse.com.

To learn more about the interest rates, fees, structures and benefits of FHA-secured HECM reverse mortgages, scroll down to view our resource guide.

Pros and Cons of Mutual of Omaha Reverse Mortgage

Why We Recommend Mutual of Omaha Reverse Mortgage

• Mutual of Omaha Reverse Mortgage is a member in good standing with the NRMLA and is a very comprehensive and customer-friendly option. 
• The company offers tools on its website to help comparison shoppers find the right HECM option for them and learn all they can about these products. 
• Among those tools are HECM estimate calculators and retirement planning calculators that allow applicants to account for how all of their current sources of income are likely to be affected by a reverse mortgage.

What Customers Are Saying

This lender has an A rating with the Better Business Bureau. On Consumeraffairs.com, multiple reviewers have cited Mutual of Omaha Bank Reverse Mortgage’s commitment to customer care, such as Jose of California, who stated that, “My reverse mortgage application process was sometimes confounding because of an unhelpful HOA, among other things. Cheryl **, from Mutual of Omaha, had the patience and good grace to help me with tasks that went above and beyond and to reassure me that it would all be worth it in the end.”

Other satisfied customers also praised Mutual of Omaha Reverse Mortgage’s helpful staff, including Phyliss of Nevada, who wrote “The Process went quickly and helped me immensely. Always kept me updated on the process. I would highly recommend this company to anyone thinking of doing a reverse mortgage. I was very happy with the whole process.”

Fairway Independent Mortgage Corporation–Fairway Reverse

Fairway Independent Mortgage – Fairway Reverse offers traditional HECM reverse mortgages as well as proprietary jumbo reverse mortgages. It is a particularly user-friendly lender as well as one of the most widespread, with loan officers located across the United States. However, its use of technology is what really makes it stand out among reverse mortgage lenders. Its FairwayNow app allows consumers to stay up to date and in touch with their reverse mortgage funds, and includes tools that make it easy to contact loan officers, check the status of an application, download and print documents and much more. 

The Fairway website also features pages for all states except New York where users can contact loan specialists that offer reverse mortgages in their area. Its Resource Center is a particularly helpful resource as well, providing not only reverse mortgage FAQs and a reverse mortgage calculator, but also access to both a book and reverse mortgage brochure at no cost. 

Products Offered by Fairway Independent Mortgage – Fairway Reverse

Fairway Jumbo Reverse Mortgage

Fairway offers jumbo reverse mortgages to customers who own high value homes. This option allows them to borrow up to $4 million dollars, significantly more than the maximum allowed with a HECM reverse mortgage.  

The Fairway private jumbo reverse mortgage offers:

• Available for seniors 55 years of age or older
• Access up to $4 million of equity
• Options for lump sum or line of credit payouts
• No mortgage insurance premiums
• Less restrictive qualifications for condos than HECMs

Requirements to qualify:

• Must be 55 years of age or older
• Property must be valued at over $1 million
• Must meet with a licensed counselor to apply
• Must undergo a financial assessment and credit check
• Property must be your primary residence

FHA-Insured Reverse Mortgages from Fairway 

Fairway is licensed by the federal government to originate and service traditional HECMs (Home Equity Conversion Mortgages), which are heavily regulated. As rate and fee caps leave little room for variation, HECMs from all lenders are nearly the same, though shoppers should still apply with multiple lenders like Fairway to find their best interest rate as well as to compare customer service and resources. 

Fairway Independent Mortgage Corporation’s HECM options include:

• Adjustable Rate HECMs
• Fixed Rate HECMs
• HECMs for Purchase

To talk about a reverse mortgage with a licensed specialist Fairway Independent Mortgage, call 1-800 796-9118 or contact them online at fairwayreverse.com.

To learn more about the interest rates, fees, structures and benefits of FHA-secured HECM reverse mortgages, scroll down to view our resource guide.

Pros and Cons of Fairway Independent Mortgage – Fairway Reverse

Why We Recommend Fairway Independent Mortgage – Fairway Reverse

• What we appreciate most about this lender is its broad network of office locations in each state where it lends, as well as the fact that it leverages technology to make staying connected as simple as possible for borrowers. 
• Using apps and web pages for loan officers in each state, Fairway Independent Mortgage creates multiple avenues for clients and applicants to reach a dedicated professional who is familiar with their personal circumstances. 
• The customer support at Fairway was a large part of what made them one of our top nine reverse mortgage lenders of 2022.

What Customers Are Saying

Fairway Independent Mortgage has an A+ rating with the Better Business Bureau, and reviewers on the BBB website seem to appreciate Fairway’s approach to customer service. Elizabeth L. stated, “It has been a long process but they have been there all the way with us. They have been very supportive and have taken away all my stress over the reverse mortgage. Love these guys, they are the best at what they do.”

Fairway Independent Mortgage is also a great option for first-time borrowers who may come into the reverse loan application process without much knowledge of HECM products. Kayla S. was uninformed on reverse mortgages when she applied with Fairway, and after her loan was closed, went to the Better Business Bureau site to state that “Being a first time home buyer I went into this process not knowing anything. Simon A*** and his team were EXTREMELY helpful, he walked me through each step of the process, he answered the many questions I had, and he went above and beyond to make sure I felt comfortable with each step. I would highly recommend this lender. It did not matter if I had a question during business hours or not, he was very quick about answering emails and returning phone calls.”

Other customers also expressed appreciation for how Fairway employees explain company products to those who are unfamiliar with them: “… was very patient, answering all my questions and offering information to help me be more educated on the process and types of mortgages. Thanks to Brian we are able to pay off school loans and set my family up for a better financial future.” 

Longbridge Financial 

Longbridge Financial is one of our top lenders of both private and government secured reverse mortgages. We were impressed with the unusually high transparency of the marketing language on its website, but the main selling point for us is its client guarantee, which they call the Longbridge Commitment. This guarantee includes free identity theft protection, continual updates and weekly check-ins, a goal of closing mortgage loans within 45 days, and a pledge to let you know if a reverse mortgage is not a good fit for you. On top of all of that, Longbridge Financial always retains the servicing of its loans and will work with customers over the life of their reverse mortgage contract. 

The Longbridge website provides a broad range of consumer tools and resources, including an article that explains what’s involved in reverse mortgage counseling sessions, as well as a piece about what to expect when repaying your loan. Its free loan calculator also allows users to input some basic information and get either an email or a call back to receive their quote. All of this, in addition to certification by the National Reverse Mortgage Lenders Association for its high standards of ethical business practice, ensures customers will have a positive experience working with this lender. 

Products Offered by Longbridge Financial

The Longbridge Platinum Private Reverse Mortgage

Longbridge Platinum allows owners of high value, single family homes and condos to access more of their equity than a traditional, government regulated reverse mortgage would allow. Customers can either receive their funds as a lump sum payout or as a line of credit.  

The Longbridge Platinum private reverse mortgage offers:

• Available for seniors 55 and older
• Loan amounts up to $4,000,000
• Low upfront costs 
• No mortgage insurance premium 
• No initial withdrawal limits option
• Combination cash and line of credit option
• Condominium communities more likely to be eligible
• Streamlined approval process

Requirements to qualify:

• Must be 55 years of age or older
• Must have all or most of your mortgage paid down
• Property must be high value 
• Must meet with a licensed counselor to apply
• Must undergo a financial assessment and credit check
• Property must be your primary residence

FHA-Insured Reverse Mortgages from Longbridge Financial

Longbridge Financial is an FHA-licensed lender of traditional HECM reverse mortgages, including adjustable and fixed rate HECMs as well as HECMs to help with new home purchases. Traditional HECMs are very heavily regulated, making the offerings of different lenders about the same; however, Longbridge Financial’s NRMLA certification and its highly competent approach to customer care makes it one of our best lenders to comparison shop with in 2022.

Longbridge Financial’s HECM options include:

• Adjustable Rate HECMs
• Fixed Rate HECMs
• HECMs for Purchase

To talk about your options with a licensed specialist at Longbridge Financial, call (866) 957-3471 or go online to visit Longbridge-Financial.com.

To learn more about the interest rates, fees, structures and benefits of FHA-secured HECM reverse mortgages, scroll down to view our resource guide.

Pros and Cons of Longbridge Financial

Why We Recommend Longbridge Financial

• Longbridge impressed us with the unusually high transparency of the marketing language used on its website, signaling that this lender is not interested in misleading potential clients. 
• With a plain-spoken and open approach to customer service, Longbridge Financial offers reverse mortgage comparison shoppers plenty of advantageous online resources.

• The Longridge Commitment is this lender’s client guarantee, and it includes identity theft protection as well as a pledge that Longbridge will always let a potential applicant know if a reverse mortgage is not the right product for them. 
• Also included in the Longbridge Commitment is a pledge to update borrowers at least weekly throughout their application process and to close loans within 45 days or less.

What Customers Are Saying

This lender has maintained an A+ rating with the Better Business Bureau and, while Longbridge Financial is not a large lender, there are mostly positive customer reviews for them on sites like BBB.org touting the high transparency and supportive customer care that Longbridge provides. A Better Business Bureau reviewer identified only as Rick stated that, “We looked at four reverse mortgage lenders and carefully (painstakingly) chose Longbridge. Their agent was very knowledgeable and gave us a no BS review of their product.” 

Other happy customers also had only positive things to say about Longbridge Financial in comparison to other companies: “I can’t say enough about this company. Use them with confidence. I shopped around with other reverse mortgage companies. Longbridge was the best. When I told the other companies I was going with Longbridge they said they were a good Co. Nice response from the competition.” 

Reviewers have used sites like Trustpilot.com as well to express their satisfaction with Longbridge’s client care, like Virgil Claycamp, who stated that, “The whole process was very low key, no pressure, easy and surprisingly quick.”

Quontic Bank

Quontic Bank is an all-digital bank and a Certified Community Development Financial Institution (CDFI) specializing in making home ownership possible for economically disadvantaged communities. In addition to loans for those with variable income, it offers traditional mortgages and VA and FHA loans and is licensed to offer HECM reverse mortgages in all 50 states. 

While Quontic is not a reverse-only lender and has originated somewhat fewer reverse mortgages than the other lenders we’ve covered, it has a national reputation as a long-standing institution. Its broad list of accolades from professional organizations in banking also clearly demonstrates the level of professionalism that you can expect from Quontic. To talk about your options with a licensed specialist at Quontic Bank, call (800) 908-6600, or contact them online at QuonticBank.com.

Products Offered by Quontic Bank

FHA-Insured Reverse Mortgages from Quontic Bank

Quontic HECM offerings are FHA-approved, which means they are heavily regulated to be a low-cost option for seniors. While you may find slightly different interest rates and fees from other lenders, possibly the most important thing to shop for in your search for your best HECM option is comprehensive customer service, which Quontic has with its customer-first focus. 

To talk about your options with a licensed specialist at Quontic Bank, call (800) 908-6600, or contact them online at QuonticBank.com.

Quontic’s HECM options include:

• Adjustable Rate HECMs
• Fixed Rate HECMs
• HECMs for Purchase

To learn more about the interest rates, fees, structures and benefits of FHA-secured HECM reverse mortgages, scroll down to view our resource guide.

Pros and Cons of Quontic Bank

Why We Recommend Quontic Bank

• Quontic Bank stands out for us because it has a long history and offers many different types of financial products, including personal banking. 
• Quontic was rated as the best overall online bank in 2022 by Forbes and among 2022’s best banks by Newsweek and GoBankingRates.
• Consumers have reviewed Quontic very positively on sites like BBB.org and Lending Tree. 

What Customers Are Saying

This lender has an A+ rating with the Better Business Bureau. David D. writes, “I just had my home refinanced through Quontic Bank with the help of Alex B***. He did an extraordinary job of leading me through each phase of the process. He was on top of every detail. He made sure that I understood every step of the process. He is very knowledgeable with what he does. He was very prompt with what he could. I was very pleased with the service.”

Clients of Quontic Bank have cited this lender’s exemplary customer care all over the internet. On TrustPilot.com, common themes in consumer reviews are Quontic’s adaptability to borrowers’ changing circumstances and support. Raye from Pensacola, FL writes, “From the first communication with Frank through to the closing of my reverse mortgage he was very responsive to my concerns and needs. He patiently walked me through the entire process answering every question I had along the way. The process went very smoothly and I feel like I’ve made a friend! I could not make a higher recommendation.”

Others also had positive experiences with Quontic Bank employees, describing them as superior to those of other companies: “Texas Lending made us feel uncomfortable with actions and narrative going on so we withdrew. A third try this summer gave us Quontic Bank and Megan Hardin. Our first conversation with Megan gave us a good feeling that she is someone who understands what we’ve been going through and would do all she could do to refinance our home.”

Reverse Mortgage Basics

A reverse mortgage is essentially an advance on your home’s equity, borrowed against the likely eventual sale price of your primary residence. Reverse mortgages differ from average “forward” home mortgages in that reverse borrowers receive payments from the lender over time rather than making monthly payments on their loan, and they are almost exclusively for people 62 and older. When reverse mortgage borrowers are ready to move or they pass away, the loan and its requisite costs and fees are repaid from the home’s sale price or by heirs. 

Reverse mortgage borrowers have multiple options for the type of reverse product they wish to receive, though most people use Home Equity Conversion Mortgages (HECMs). HECMs are structured, insured and regulated by the federal government to keep them relatively safe and affordable for seniors. With the various types of reverse mortgages, which we’ll cover below, borrowers can choose how and when they would like to receive their loan proceeds and pay interest. 

Reverse Mortgage Eligibility Requirements

The FHA eligibility guidelines for traditional HECM reverse mortgages can be complex, so if you’re considering shopping for a reverse, your first step should be to seek counseling with an HECM representative licensed by the Department of Housing and Urban Development (HUD). We’ll talk more about how to find local HUD counselors in a moment, but for now, let’s look at the basic eligibility requirements for a reverse mortgage. Note that private, or “jumbo” reverse mortgages offered by individual banks for high-value homes usually have the same basic requirements as HECMs.

Reverse mortgage eligibility requirements for applicants:

• Must be at least 62 years old
• The property must be your primary residence 
• The property’s mortgage must be paid off or have a low remaining balance
• Applicants must be able to afford property taxes, insurance, and other home costs
• Applicants must have no delinquent federal debt such as unpaid taxes 
• Must meet with a HUD-approved counselor before applying

Age and Spousal Regulations

When processing an HECM reverse mortgage application, lenders calculate how much an applicant will be allowed to borrow based on their age (minimum 62), their interest rate and the appraised value of their home. That total loan amount is referred to as the “initial principal limit”, and if you are borrowing with another person (a co-borrower) or you have a non-borrowing spouse, the principal limit is partly based on the age of the youngest co-borrower or eligible non-borrowing spouse. 

The lender will also look to the income of any non-borrowing adults who live with you in its assessment of your financial readiness for a reverse mortgage loan, but this information is only used to better understand your possible living expenses and will not be a major consideration in your loan decision.

HUD and FHA Property Standards 

The Department of Housing and Urban Development and its internal department, the Federal Housing Administration, set the standard for which properties may be reverse-eligible. They take into account a long list of considerations, from the general shape that the home is in to whether it has tax-funded solar panels. Part of the reverse mortgage application will include a property assessment and an appraisal of the home’s fair market value (FMV), and sometimes HUD will require borrowers to complete home repairs as part of the application process. 

A detailed breakdown of HUD’s property standards can be found at LendingTree.com. Typically, HUD will only require home improvements for major, long-term issues, such as pest infestation, broken windows or doors, and terrain around the home that allows water to pool on or near the foundation.

Reverse Mortgage Property Eligibility FAQs

The following are common questions for property owners to ask about their home before they begin shopping for a reverse mortgage.

Remaining Mortgage Balancesaboust set-aside

There is no one standard for how much of your existing mortgage can be left to pay off when you apply for a reverse, and often the amount you still owe can be paid using part of the proceeds from your reverse mortgage loan. However, the remaining mortgage balance should be low enough to where you can still afford your stated financial goals with the remaining reverse mortgage proceeds after paying off your existing mortgage. To qualify for an HECM, in many cases the homeowner will need to have at least 50 percent of their mortgage paid off, though this number can vary in different cases. 

The FHA states that borrowers can take up to 60 percent of their total loan proceeds in the first year of their contract. They call this the “first year limit”. But if the amount owed on an existing mortgage is equal to more than 60 percent of the first year limit, then borrowers can take out enough in that first year to pay off the total mortgage along with any other required payments, such as closing costs for the reverse mortgage contract. Under these circumstances, a borrower can receive up to 10 percent of their total reverse mortgage loan amount in addition to the 60 percent already withdrawn to pay off the existing mortgage.

Income and Credit Assessments

HECM reverse mortgage decisions are not based on a consumer’s credit score like a typical mortgage. While a credit and income assessment is required for all applicants, this is done so that lenders can find relevant information about your credit history, how much income you have from all qualifying income sources, and how your income compares to the amount of outstanding debt you have (your debt-to-income ratio). This can demonstrate to lenders whether your current financial picture can support the total costs of a reverse mortgage loan.

Income sources that are commonly assessed include:

• Employment income on your W-2s
• Income of spouse or people who live with you who are not co-borrowing
• Part-time employment income
• Overtime and bonuses
• Seasonal employment income
• Self-employment income
• Family-owned business income
• Disability
• Retirement benefits and Social Security
• Workman’s compensation
• Annuities, interest, dividends and trust income
• Rental income
• Commission-based income
• Employer housing subsidies
• Public assistance

As you can see, the financial assessment portion of a reverse mortgage application is based on a broad range of sometimes unexpected income sources. When you’re ready to apply, it helps to talk with your HUD counselor to make sure you have all relevant documents located and ready to present to your prospective lender.

Obligations of Reverse Mortgage Borrowers

When you agree to the terms of a reverse mortgage loan, you are effectively agreeing to meet certain obligations as a borrower. If for any reason you fail to meet those obligations, your loan can come due prematurely, potentially forcing you to sell your home and risking foreclosure.

Your obligations as an HECM reverse mortgage borrower include:

• Maintaining your home according to FHA property requirements
• Continuing to pay property taxes, insurance, and upkeep costs
• Maintaining the home as your primary residence for the majority of each year
• Paying off your remaining mortgage balance on closing

Pre-Application Counseling

Another requirement of an HECM reverse is that, before you can actually apply with any lender, you must either call or meet with a HUD-licensed HECM counselor. Counseling sessions usually take about an hour to complete. This session will inform you of what to ask potential lenders and how to comparison shop, and will also help you become more prepared for the application process and more informed of the risks and benefits of HECMs. To see a comprehensive guide covering what to expect from your session, have a look at this article from ReverseMortgage.org.

The following is a list of topics that your HUD counselor will cover in your session. 

• What are the client’s personal circumstances and financial needs?
• What are the features of reverse mortgages?
• What are the client’s responsibilities?
• What costs are involved?
• What are the financial and tax implications involved?
• What are some possible alternatives to a reverse mortgage?
• What are the risks of reverse mortgages?
• What are the most common scams and abuses involving reverse mortgages?

There are a number of national, HUD-approved agencies that you can call for more information on the costs, risks, and benefits of reverse mortgages, or to schedule a counseling session.

The Department of Housing and Urban Development

HUD provides a wealth of HECM information online and can be reached by visiting HUD.gov or by calling your local HUD office. For more information, visit the FHA resource center online.

The AARP

The AARP offers state-specific resources for seniors and can help you find a HUD counselor in your local area. Call them at (800) 209-8085, or read about their Reverse Mortgage Education Project online at AARP.org

The Consumer Financial Protection Bureau

The CFPB offers a comprehensive guide to reverse mortgages and can provide you with counseling and information or connect you with a HUD-approved HECM counselor. Call them at (855) 411-2372 or go online to ConsumerFinance.gov.

Types of Reverse Mortgages

HECM (Home Equity Conversion Mortgage) reverse mortgages are regulated and insured by the FHA. These come with a few options that allow borrowers to receive their payments in different ways and to choose from a range of available interest rate structures. There are three main types of HECM: Fixed rate HECMs, adjustable rate HECMs and HECMs for purchase. As you can probably guess, fixed rate and adjustable rate HECMs offer either a fixed interest rate or a rate that adjusts over time based on market index fluctuations. Other types of reverse mortgages exist for low-income homeowners and owners of high-value homes, and though these are not regulated or insured by the FHA, their terms and conditions mirror those of HECMs.

While fixed rate reverse mortgages typically offer a slightly higher marginal interest rate than adjustable rate products, they could provide a lower interest rate in the long run as we may enter a rising interest rate environment within the next five years. For this reason, adjustable rate products come with unstable interest rates. However, a fixed rate reverse mortgage is likely to pay less equity to borrowers, and adjustable rate products offer a much more adaptable structure for long-term borrowers.

Fixed Rate HECMs

Fixed rate HECMs offer lump sum payments at closing for borrowers who have immediate cash needs. These have many of the same requirements for borrowers as adjustable rate HECMs and feature the same basic costs and structure. What can make fixed rate HECMs less desirable is that they provide only a single payout option for borrowers: A lump sum payment delivered on closing. 

All HECM borrowers are limited to receiving only up to 60 percent of their total loan amount within the first year of their reverse mortgage contract. This first-year limit is in place to help reverse mortgage borrowers make their retirement funds last as long as possible. For lump sum recipients, this means that the total of what they can receive from their HECM will come to them as soon as the loan contract begins, effectively limiting their total payout to the first-year limit of 60 percent of their available loan balance. Any mortgage or debt payments made from the proceeds are counted against that 60 percent as well. 

Adjustable Rate HECMs

Adjustable rate HECMs come with interest rates that vary with the LIBOR index, and borrowers can choose whether they’d like their rate to adjust on a monthly or yearly basis. However, only the index-linked portion of the interest rate will vary while the borrower’s added interest margin, which is based on their personal circumstances, will remain fixed throughout the term of the reverse contract. 

Adjustable rate HECMs offer options to receive a lump sum, monthly payments, a line of credit that taps your equity, or a combination of these. The line of credit option is notable because loan proceeds in a line of credit gain interest at around 4.5 to 5 percent annually (at the same interest rate the borrower is charged for their reverse). More than 65 percent of HECM borrowers use the line of credit option or a combination of payment options that includes a LOC. A line of credit from an adjustable rate HECM is a great means of mitigating the costs of borrowing, even in a rising interest rate environment.

HECMs for Purchase

The third type of FHA-regulated HECM is called an HECM for purchase, and it’s a solid option for house shoppers who wish to keep their retirement funds as liquid as possible. These HECMs require borrowers to move into their new home within 60 days of purchase, so it isn’t a good option for buying a vacation home. 

An HECM for purchase will pay anywhere from about 38 percent to 70 percent of a new home’s total cost. The reverse mortgage borrower pays the remainder as a down payment using part of the proceeds from the sale of their previous home. Like fixed-rate HECMs, HECMs for purchase only offer lump-sum payments as the cash will only be needed for a single, immediate purpose. Once the reverse mortgaged home is sold, as is the case with our two other HECM options listed above, the borrowers or their heirs receive any equity that remains after the loan is repaid from the proceeds of that sale.

Single-Purpose Reverse Mortgages

Unlike traditional HECMs, single-purpose reverse mortgages are not insured or structured by the FHA. However, their structure and terms tend to mirror those of HECMs. These loans are for low-income families and individuals and are typically available from nonprofits and state/local governments. 

A single purpose HECM is granted to borrowers who have a specific financial need, such as to pay their property taxes or fund home repairs, and they come with fewer costs and fees. They are the most affordable option for a reverse mortgage, and their specific terms and conditions are determined by the organizations or government entities that offer them.

Proprietary (Privately Offered) Reverse Mortgages

Proprietary reverse mortgages are often called “jumbo” reverse mortgage loans. These are used by people who live in high-value homes, typically of a fair market value of at least $1M. However, some jumbo reverse mortgages are available for condos valued at $350,000 to $500,000 and up, making these products available in some states to owners of medium-value condominiums located in complexes that cannot get FHA approval. Unlike an FHA-backed HECM, a private reverse mortgage is free from FHA limitations and approval guidelines.

Most proprietary reverses offer lump-sum payouts and fixed interest rates only, though a new trend is slowly catching on for banks to provide other payout options and adjustable interest rates in certain regions. Because they offer lump sum payments, these products are attractive to homeowners who wish to receive a lump sum without the FHA’s first-year limitation that would keep them from receiving any more than 60 percent of their available loan amount. A major tradeoff of opting for a private reverse loan is that private borrowers must shoulder the risk that the lender can choose to freeze their funds at any time. For this reason, it is advisable for private reverse borrowers to opt for lump sum payouts to be received at closing. Proprietary reverses also appeal to those who have enough equity in their homes to potentially receive more than the FHA’s overall HECM loan limit of $726,525, though that limit has been rising steadily for years. 

Most institutions that offer proprietary reverse mortgages only offer them in a limited number of states, with the top lenders in our list above offering private reverses in an average of 22 states. Proprietary reverse mortgages are not FHA insured, though private insurance is available. These products are often advertised as having lower costs and fees than traditional HECMs, though their costs are not capped and can be set and raised at the bank’s discretion. Interest rates may be higher as well, as loan amounts can go beyond the FHA limit of $726,525.

Who Should Consider a Reverse Mortgage?

Reverse mortgages are best for seniors whose circumstances make this type of loan as low risk as possible and for those who have a specific financial goal in mind. But there are definitely risks to procuring any kind of debt product, even for people who believe they are currently in a low-risk position. 

For example, if there is a financial emergency that renders you incapable of keeping up with property taxes and home insurance, your home could go into foreclosure under a reverse mortgage. Furthermore, for seniors who use a reverse to consolidate debt, there is also the risk that they will build up further debt thereafter and end up in even worse shape than before. There are many cases where options other than a reverse mortgage should be considered, so if you or a loved one is considering this type of loan, we recommend that you first read this article from ConsumerFinance.gov to learn more about the risks, and we recommend that you get in touch with a financial advisor or HUD counselor to discuss your financial picture.

The following are questions that all reverse mortgage borrowers should ask themselves before signing a contract.

How much money are you prepared to lose on the eventual sale of your home to finance your immediate needs?

Reverse mortgages all come with up-front and ongoing costs and fees, and many of these can gain interest over the life of your loan. Costs that are not paid up front on closing are added to the interest-gaining balance that you will be charged by your lender and to the monthly insurance premiums you must pay to the FHA. The result is that reverse mortgages can cannibalize your home’s equity, potentially leaving you with little to no profit from your home’s eventual sale. 

Is there another way for you to meet your current financial goals that may be cheaper?

Homeowners are advised to find out if there are ways to lower their expenses before tapping into their home’s equity. There are many state and local programs that can help with bills and living expenses and downsizing to a more affordable home may be worth considering as well.

Could it be better for you to wait to use your equity should a financial emergency arise?

In a financial emergency, the equity you’ve built up in your home could be one of your only options for funding. The FHA recommends that it’s usually best to preserve your equity if there are other resources at your disposal for current, non-emergency cash needs.

Are you on a fixed income with limited or no other assets?

For people on a low or fixed income, there is a risk of foreclosure with a reverse mortgage as failure to pay your property taxes and costs or failure to maintain your home could result in the loan balance coming due prematurely. Again, in these cases, downsizing may be a better option as selling your home to buy something smaller or a home in a less expensive area could leave you with greater financial security.

Do you plan to leave your home to an heir?

Taking out a reverse mortgage can complicate the transfer of your home to your heirs. After you decide to move or you pass away, if your heirs wish to keep your home, they will have to pay the lesser of the full amount of the reverse mortgage loan or 95 percent of the home’s then-current fair market value.

How long do you plan to live in your home?

Reverse mortgages make the most sense for people who plan to live in their property for a number of years to come. The starting costs and fees of a reverse can make your investment in an HECM more expensive than it’s worth if you plan to sell your home and recover your equity within a relatively short time frame. 

Also, the mortgage insurance premium that HECM borrowers pay is in place partly to ensure that if a home gradually loses value over the term of a reverse loan, the final balance due will never be more than the fair market value that the home carries when it’s time to sell. This means that if you only live in your property for a short time after procuring an HECM, you will have been paying for insurance you were never likely to need.

Does your spouse plan to remain in the home after you’re gone?

This question will require discussion with your spouse or partner. As long as your spouse signs as a co-borrower with you on your reverse mortgage loan, if one of you dies or otherwise must move, such as into a nursing facility or a relative’s home, the other borrowing party will be able to keep living in the home and continue the reverse mortgage contract. 

If your spouse is too young to sign with you as a co-borrower (under 62), they may still be able to remain in the home after your death as long as they qualify as an eligible non-borrowing spouse. However, if you remain living but must move out, this exemption for the non-borrowing spouse doesn’t apply and they may be forced to leave the home after you have been living elsewhere for a consecutive 12 months.

Costs of a Reverse Mortgage

Costs and fees that come with a reverse mortgage contract fall into two main categories: Up-front costs paid at closing and ongoing costs to be paid at the end of the loan’s term. No monthly or yearly payments are required with a reverse mortgage, making this type of loan ideal for people who would benefit from removing monthly mortgage payments from their budget.

Some reverse mortgage expenses, such as closing costs and origination fees, may be rolled into the available loan amount as an ongoing fee at the borrower’s discretion. However, most ongoing costs do accrue interest as part of the outstanding loan amount, and because HECM interest is compounded annually, some borrowers choose to pay whatever they can afford up front. Some also choose to make prepayments on their loan, called “points” purchasing, in order to pay less interest throughout the life of their reverse mortgage.

Up-Front Fees 

Counseling Fees

An hour-long session with a HUD-approved counselor is required before you can apply for an FHA-backed reverse mortgage. After your counseling session is complete, you will receive a certificate stating that you’ve completed your counseling which you will then show to your prospective lender as part of the application process. Though some HUD-approved organizations receive grants to offer this counseling for free, it is common for the session to cost from $125 to $175. This fee is almost always required as an up-front payment. For borrowers of privately offered “jumbo” reverse mortgages, the lender will require a counseling session with one of their licensed staff members, and typically this can cost around $125 to $175 as well.

Closing Costs

There is a range of closing costs borrowers can expect to pay, and according to the National Reverse Mortgage Lenders Association, these can cost around $1,000 to $2,000 total. As previously mentioned, borrowers can usually choose to either pay these costs upfront or roll them into their total reverse loan amount. 

• Credit reporting fee: $20 to $50
• Flood certification fee: $20 to $30
• Escrow costs: $150 to $800
• Document preparation: $75 to $150
• Recording fee: $50 to $500
• Courier fee: $50
• Title insurance: Varies by loan amount and region
• Pest inspection: $100
• Survey fee: $100 to $250

Appraisal Fees

An independent appraisal specialist must survey your home’s long-term fitness before you can be issued an HECM reverse mortgage. According to top HECM lender American Advisors Group, the average cost of appraisal varies by region but is generally close to $450. If the appraiser finds that your home is in need of repairs before a loan can be granted, they will need to return to reappraise the property after the repairs are done, which costs another $100 to $150 on average.

Loan Origination Fees

Origination fees may vary depending on the lender you choose, and lenders may assess different fee amounts for borrowers with differing financial circumstances and loan amounts. While some lenders offer rebates or discounts in certain cases, because these fees are regulated and kept low by the FHA, it’s not uncommon for lenders to charge the maximum allowable loan origination fee or an amount very close to it. 

For homes valued at $125,000 or less, origination fees are capped at $2,500. Homes valued at more than $125,000 can carry origination fees of 2 percent of the first $200,000 and 1 percent of the value that surpasses $200,000. In these cases, the maximum allowable fee is capped at $6,000. Only homeowners whose homes are valued at $400,000 would be charged the maximum fee of $6,000. For homes of value greater than $400,000, this fee would remain the same.

Initial Mortgage Insurance Fee 

The FHA insures HECM borrowers against potential bank failure and losses of home value that can occur over time. Loss of value can happen for many reasons and can make repaying a reverse mortgage more difficult to do by the traditional means of selling the home. With mortgage insurance, borrowers can never owe more than the fair market value of their home when it’s time to sell, making defaults much less likely.

While mortgage insurance premiums are rolled into the ongoing cost of an HECM, a single up-front fee must be paid at closing. This fee will be equal to 2 percent of your home’s appraised value or of the maximum HECM loan amount of $726,525 (whichever is lesser).

Ongoing Fees

Interest

HECM interest rates are only charged on a borrower’s outstanding loan amount (the amount of the principal that they have withdrawn) and are compounded annually. Interest rates for these products can seem a little complicated, but they can be broken down into easy-to-understand components. Borrowers pay interest of two types on their reverse mortgage loan: An index-linked percentage and a margin.

The index-linked portion of your overall interest rate is determined using the London Interbank Offered Rate (LIBOR), which is a fluctuating standard determined by international banking practices and economic forces. The marginal portion of your interest rate is based on your personal circumstances at the time of closing, such as the appraised value of your home, your credit history, your income and the age of the youngest borrower on your reverse mortgage contract.

If you opt to apply for a fixed rate HECM or an HECM for purchase, your marginal interest rate will be slightly higher than that which you’d get if you went with an adjustable rate HECM instead. For adjustable rate products, index-linked interest rates do fluctuate and are likely to rise over the next few years, but only the index-linked portion of the interest rate will fluctuate. HECM borrowers’ marginal interest rates do not change throughout the life of a reverse loan. Borrowers can choose whether they’d like their index-linked rate adjusted on a monthly or yearly basis, though opting to adjust monthly can carry a slightly higher monthly servicing fee, which we’ll discuss below.

Though borrowers must still pay taxes on the final sale price of their home at the end of a reverse mortgage contract, interest paid on the reverse loan amount becomes tax deductible after it is paid off. This and other measures, such as electing to receive a line of credit with an adjustable rate HECM, can significantly mitigate the impact of interest on your retirement funds. 

Mortgage Insurance Premiums

As discussed above, the FHA insures HECM reverse mortgages to protect borrowers against bank failure and home value loss. Mortgage insurance premiums cost 0.5 percent of whatever the outstanding loan balance is when these fees are assessed on an annual basis. Premium payments are no longer added to the balance of an HECM loan once the five-year point of a contract is reached or the total loan balance reaches 78 percent of the property value (whichever happens first). Though they are not paid until the loan balance becomes due and payable, FHA mortgage insurance premiums do not accrue interest.

Service Fees

Lenders must engage in ongoing efforts to see that borrowers receive timely payments, adequate customer service, online banking tools, and document processing, and for these services, some lenders may charge servicing fees. Though service fees are much less common now than they once were, they typically cost between $25 and $35 monthly, and the amount can differ based on whether borrowers of adjustable rate reverse mortgages elect to have their rate adjusted on a monthly or yearly basis. For yearly rate adjustments, servicing fees can be no greater than $30 per month, while monthly rate adjustments carry a maximum fee of $35 per month. If servicing fees are charged, the first servicing fee is paid up front but the rest is rolled into the total amount of a reverse mortgage loan to gain interest over time. However, some lenders add a fraction of a percent onto borrowers’ marginal interest rate to cover servicing costs.

Buyer’s Guide: How to Choose a Reverse Mortgage

When shopping for a reverse mortgage, most consumers neglect to comparison shop. FHA regulation of HECM reverse mortgages may be behind this trend as regulation renders the costs and fees for HECMs somewhat homogenous. But at Caring, we do recommend comparison shopping for reverse mortgage products as some lenders may offer lower marginal interest rates than others, and some will even cut out or offer rebates for the $25 to $35 monthly service fees that commonly come with a reverse mortgage. Furthermore, shopping around may help you gain a better understanding of which major type of reverse mortgage would be the best fit for your circumstances and which lender can offer you the kind of customer service you desire.

Once it’s time to start fielding offers from lenders, there are a few measures that reverse mortgage shoppers should take to home in on their pool of potential lenders. We’ll explore these measures below, step by step.

Get financial counseling with a HUD representative. 

A HUD counselor can help you understand whether an HECM is an appropriate plan for someone in your financial position. They will ask some basic questions about your financial picture and give you vital information on the risks of reverse mortgages, and they can inform you of the kinds of questions you will need to ask when you begin fielding offers. Though some organizations receive grants to offer this counseling for free, it is common for the session to cost from $125 to $175. However, in some cases, that fee can be rolled into the reverse mortgage loan to be repaid at the end of the loan’s term.

To find a HUD counselor in your locale, HUD.gov recommends using the HECM Counselor Roster online or calling (800) 569-4287. To find a list of nationwide HUD counselors, use the HUD Intermediaries Providing HECM Counseling Nationwide list.

Meet with a financial advisor.

While HUD counselors are very informed on the specifics of HECM reverse mortgage products, a financial specialist who is more familiar with your finances, history, and attitude toward your money can also help you figure out if a reverse is truly right for you. An independent advisor can also help you make a long-term plan based on which type of reverse mortgage you ultimately choose.

Research lenders’ backgrounds.

There are lots of online resources where reverse mortgage shoppers can find consumer reviews for lenders, such as the Better Business Bureau, but it may benefit you to look a little deeper than that. Reverse mortgage lenders will have any regulatory actions taken against them since at least 2012 listed on NMLS Consumer Access (The Nationwide Mortgage Licensing System and Registry). 

Lenders are required to advertise their NMLS number on their websites, and these can often be found at the very bottom of their web pages or on their contact pages. Just find this number and enter it in the search field on the NMLS website linked above and elect to filter your results by company. You’ll get a detailed list of the states where a lender is licensed to do business and any regulatory violations that have threatened to land them in court over the past seven years or more. Be advised that the majority of lenders do have at least one regulatory violation in their recent past, so it’s a good idea to look into the nature of any violations you see on NMLS before dismissing a lender.

Start fielding offers.

Because your true costs and fees with any one lender won’t be available until the formal application process is begun, it’s best to do as much homework on lenders as possible up front. When you speak to a lender’s licensed representatives, be sure and ask for specific information on their costs and fees. 

Getting exact info on origination fees may be difficult if the lender does not yet know exactly what you’re looking for and what kind of property you have, but lenders should be able to give you at least an idea of what origination fees they are likely to require and any that they do not usually require. You should also ask about servicing fees, as these costs are usually rolled into the total amount of your loan and will accrue interest. Some lenders may not charge a service fee or may offer rebates for them.

Comparison Shopping with Referral Services

If you find the comparison shopping process too time-consuming or too technologically challenging, a reverse mortgage referral service may be a good option. Many referral services connect shoppers with brokers who are licensed contractors for specific lenders, though some referral services may work with the lenders themselves. 

Caring.com is currently an affiliate of a few reputable HECM referral companies that also offer solutions for seniors outside of the HECM shopping process, such as home sale management, finding retirement benefits or providing assistance for people who are moving to a new home. Elderlife Financial is one such HECM referral service that also offers financial products of their own, providing bridge loans for seniors who are waiting for their home to sell so they can afford to move into a retirement community or senior living facility. Another great option is Paragon Home Resources which, aside from helping you find a reverse mortgage, can also help you sell your home quickly by managing the whole process from listing to closing.

Tips for Caregivers Considering a Reverse Mortgage for Seniors

For caregivers with any degree of control or input where their loved ones’ finances are concerned, supporting someone in their decision to consider a reverse mortgage presents a specific set of challenges. The following points demonstrate what caregivers can expect from this process and offer some direction on how to prepare for and navigate the reverse mortgage shopping experience from a support position.

Talk to your loved ones about their assets.

Find the fair market value of your loved ones’ home.

Fair market value is one of the main criteria on which lenders will base their reverse mortgage loan estimates for your friend or parent, so this is vital information to have during the comparison shopping process. After a reverse mortgage application is begun, lenders have a formal appraisal done for a property to get a more accurate picture of its value. The actual appraised value of the home will most likely differ somewhat from the IRS’ annual assessment of the home’s value, but having your friend or parent’s most recent property tax statement in hand will help you get your most accurate estimated quotes from lenders before beginning the application process.

Find out how much is owed on the home’s mortgage.

This is another key piece of information that lenders will ask for when you request an estimated quote. If your loved one isn’t sure how much they still owe, the amount can be determined in two simple ways: You can either ask that your friend or parent contact their lender or you can find this information on their most recent credit report. In any case, ordering a credit report is always a good idea when considering taking on a new debt obligation. The federal government provides one free credit report per year for all Americans, so before you buy a report from one of the many companies that offer them for a fee, find out if your loved one has yet received their free report for the year.

Confirm the age of the youngest borrower.

To get an estimate for a reverse mortgage, you will need to know your loved one’s exact age. Age plays a role in determining how much equity borrowers will be able to tap into, and the minimum qualifying age for reverse mortgage applicants is 62. Spouses have the option of co-borrowing a reverse mortgage, and in these cases, the age of the youngest person on the contract will be one of the main criteria that determines your friend or parent’s loan amount.

Find all applicable income sources.

The list of income sources that will be considered by a reverse mortgage lender may be longer than you’d expect. Before you begin applying for this type of loan, it’s best to explore all of your friend or parent’s income sources in detail to determine whether they receive any of the following.

• Employment income on your W-2s
• Income of spouse or people who live with you who are not co-borrowing
• Part-time employment income
• Overtime and bonuses
• Seasonal employment income
• Self-employment income
• Family-owned business income
• Disability
• Retirement benefits and Social Security
• Workman’s compensation
• Annuities, interest, dividends and trust income
• Rental income
• Commission-based income
• Employer housing subsidies
• Public assistance

If your loved one receives public assistance through Medicaid, talk to a local HUD counselor about how getting a reverse mortgage loan could affect their income.

Find the total amount of your loved ones’ debt.

Outstanding debts and credit history figure into reverse mortgage lenders’ decisions on whether to offer funding and how much they can offer. Talks about debt can be difficult, but it is necessary to account for your loved ones’ likely debt-to-income ratio and any derogatory credit history they might have. Reverse mortgage loans are unavailable to individuals who have existing federal debt until that obligation is paid off. Any liens against your friend or parents’ home will also need to be a topic of discussion as lenders may require these to be repaid out of any loan proceeds your loved one is eligible to receive. Public programs that provide loans to fund home improvements, such as HERO and PACE, are also required to be paid from reverse mortgage loan proceeds as a condition of the contract.

Ask to be included. 

In some cases, it may be a good idea to accompany your friend or parent in meetings with lenders and financial counselors. Most reverse mortgage lenders will include family and friends in meetings at the behest of the applicant, so consider asking your loved one if they’d like you to be involved in talks with lenders and find out if you can sit in on counseling sessions as well. HUD counseling sessions and counseling with financial advisors may present a challenging amount of information, but these sessions are vital to ensure that borrowers and caregivers understand what they are getting into when shopping for a reverse mortgage. 

Locate all relevant documents.

The following is a list of the documents that your friend or parent will need to present during the reverse mortgage application process. It comes to us courtesy of Casey Chisholm who writes for One Reverse Mortgage.

• Clear copy of unexpired Driver’s License or State Issued ID Card
• Clear copy of Social Security Card
• Clear copy of Social Security Awards Letter
• Clear copy of most current Homeowner’s Insurance Declaration Page showing agent name and number
• Clear copy of Property Tax Receipt
• Clear copy of Property Title/Deed and proof of satisfaction of mortgage (if applicable)
• Statement from current mortgage institution (if applicable)
• Reverse Mortgage Counseling certificate (original copy)
• Two months bank statements (all pages — even blank pages)
• Clear copies of all assets (401K, pension plan, annuities, savings etc.)
• Clear copy of Death Certificate for spouse (if applicable)
• Clear copy of Durable Power of Attorney, Trust Agreement, or Conservatorship (if applicable)

Talk about reverse mortgage scams.

Though traditional HECM reverse mortgages are heavily regulated by the FHA, there are still plenty of enterprising individuals who find ways to take advantage of, or outright rob the elderly using false promises regarding products like reverse mortgages. Discussing what to look out for can protect your loved one from this kind of exploitation.

The FBI states that “victim seniors are offered free homes, investment opportunities, and foreclosure or refinance assistance”, and that they are also targeted by schemes involving straw real estate buyers. If you or your loved one are offered or asked to procure a reverse mortgage as an opportunity to delay Social Security payments, buy a low-cost property for no money down or fund home repairs, or if you’re offered free income with no risk by procuring a reverse, this should put you on your guard.

The following are tactics that can help you protect yourself and your loved ones from reverse mortgage scams.

• Seek out your own HUD approved reverse mortgage counselor
• Do not respond to unsolicited ads or offers
• Be suspicious of anyone who downplays the risks and obligations of a reverse
• Do not sign anything that you don’t fully understand
• Do not accept payments or a title for a home you did not purchase
• Make sure that you and your loved one attend the loan closing
• Make sure that your loved one receives payments personally
• Find background info on lenders using the Better Business Bureau and the NMLS

Offer help and support with technological tools.

The application and closing process for a reverse mortgage can take much longer than it should if borrowers are not technologically inclined. If documents must be transmitted and signed using snail mail or a borrower is unfamiliar with email and other applications that lenders customarily use, this can throw a monkey wrench into the process and delay reverse mortgage payments. It can also make comparison shopping a much more difficult and time-consuming prospect. 

To help your friend or parent find the best lender for them and receive their reverse mortgage proceeds with as little difficulty as possible, consider preparing yourself to provide whatever technical support they may need, and make sure they know that you are there for them on that front.

Finding Reverse Mortgages for Low-Income Seniors

There is a reverse mortgage option for low- to moderate-income seniors called a single-purpose reverse mortgage. These cost less than a traditional reverse because they provide advances on smaller amounts of a homeowner’s equity and come with fewer and lower fees. Single purpose loans are only provided for single, crucial expenses that are pre-approved by lenders, like property tax payments or emergency home repairs. Single-purpose loans are not structured or insured by the FHA like a traditional HECM; rather, they are available from nonprofit organizations, credit unions and some state and local government institutions which determine their structures and costs.

It’s important to note that although Social Security and Medicare eligibility are not affected by a reverse mortgage loan, needs-based government programs like Medicaid and Supplemental Security Income (SSI) may be affected by the new asset that a loan represents.

Costs and Fees of Single-Purpose Reverse Mortgages

Like traditional HECMs, repayment of a single-purpose reverse is not done on a monthly basis but happens when the homeowner sells the home, moves or passes away. This type of reverse mortgage is less expensive than an HECM and taps less of a homeowner’s equity than other reverse mortgage options. 

Some lenders provide these loans with “simple” rather than the traditional “compound” interest rate structures, which means that some single-purpose reverse mortgage borrowers are not required to pay interest on their interest. Interest rates are also likely to be lower than those that come with other reverse loans. Single-purpose reverses typically do not require origination fees, mortgage insurance fees or premiums, and offer low to no service fees. 

Finding a Single-Purpose Reverse Mortgage

Locating these products can be difficult as they are advertised under a variety of names, such as property tax deferral programs and deferred payment loans. Also, a variety of different organizations and institutions offer single-purpose loans, so it can be hard to pin down where to search for lenders. The Federal Trade Commission recommends that people interested in this type of loan should contact their local Area Agencies on Aging (AAA). The AAA is a national network of resource centers for elders, and each state has multiple regional AAA locations that specialize in helping seniors and caregivers in their specific area. 

To find your nearest AAA office location, visit Eldercare.gov to use the locator tool there, or reach them by phone at (800) 677-1116. To make sure you get the help you need, ask an AAA representative about single-purpose reverse mortgages, local tax deferral programs, deferred payment loans, and loan or grant programs for home renovations.

Frequently Asked Questions

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