Best Reverse Mortgage Companies of 2023

1. Best for Low Interest Rates

   Longbridge Financial

   Our Partner

   • Company Highlight:

     Consistently had the lowest interest rates across 2021

   • Loan Types:

     HECM, HECM for purchase, jumbo loans

   Learn More

2. Best for Product Variety

   Finance of America Reverse

   Our Partner

   • Company Highlight:

     Offers reverse mortgages, as well as other home equity products and retirement solutions

   • Loan Types:

     HECM, HECM for purchase, jumbo loans, Equity Avail retirement mortgage, home-sharing

   Learn More

3. Easy to Reach by Phone, Email, and via Online Chat Feature

   Premier Reverse Mortgage

   Our Partner

   • Company Highlight:

     Offers free reverse mortgage quotes along with a wealth of educational resources for potential lenders

   • Loan Types:

     HECM Traditional, HECM for Purchase, HECM Refinance

   Learn More

4. Free Reverse Mortgage Guide Provided

   Mutual of Omaha Mortgage

   Our Partner

   • Company Highlight:

     Highly rated by past customers and has an A+ rating from the Better Business Bureau

   • Loan Types:

     HECM, HECM for purchase, jumbo loans

   Learn More

A reverse mortgage is a type of home loan for seniors that works backward. Rather than making payments to your lender, you receive payments — sort of like an advance on your eventual home sale.

If you’re considering one of these loans, there are many reverse mortgage companies you could work with. Some offer more loan options or lower rates, while others come with better service or cater to different age groups than the typical 62-plus.

Not sure which one to choose? See our picks for the best reverse mortgage companies below.

Our Top Picks for Best Reverse Mortgage Companies

• Best for low interest rates: Longbridge Financial

• Best for product variety: Finance of America Reverse

• Best for homebuyers: Fairway Independent Mortgage Company

• Best for tech-savvy borrowers: Open Mortgage

• Best customer service: American Advisors Group

Best Reverse Mortgage Reviews

Pros

• Low interest rates

• Informative website with lots of resources

• Jumbo loans go down to age 55

• Remains your servicer after closing

Cons

• HECM not licensed in Hawaii

• 2019 <a href=”https://www.nmlsconsumeraccess.org/EntityDetails.aspx/Artifact/Other.pdf?q=275798-366980″>regulatory action</a> regarding licensing in California

• 55+ loans not available in every state

• Mortgage applications for properties in the state of New York cannot be processed on the website

HIGHLIGHTS

Products

HECM, HECM for purchase, jumbo loans

Loan amounts

Up to $4 million

States served

49 states, plus Washington, D.C. (not Hawaii)

Why we chose this company: Longbridge Financial (NMLS #957935) is our top reverse mortgage lender. It consistently offers some of the lowest interest rates among the companies we reviewed.

Longbridge offers Home Equity Conversion Loans (HECM) and HECMs for purchase. The lender’s proprietary Longbridge Platinum loan is a jumbo reverse mortgage with a maximum borrowing limit of $4 million. That’s the extent of their reverse mortgage products, though, so they don’t offer a lot of variety.

The company also has great customer reviews and few complaints, and it remains your servicer after closing — meaning you’ll do business with the same company for as long as you have the loan.

Pros

• Wide product variety

• Jumbo loans go down to age 55

• Informative website with lots of resources

• A+ BBB rating

• Remains your servicer after closing

Cons

• Jumbos not available in every state

• 55+ loans not available in every state

• Limited brick-and-mortar locations for in-person appointments

HIGHLIGHTS

Products

HECM, HECM for purchase, jumbo loans, Equity Avail proprietary mortgage, home-sharing

Loan amounts

Up to $4 million

States served

All 50 states, plus D.C.

Why we chose this company: Finance of America Reverse (NMLS #2285) has something for just about everyone, with a large variety of mortgage options.

FAR offers the popular HECM reverse mortgage, HomeSafe jumbo loans up to $4 million and a few alternatives that older homeowners might want to consider.

For those that can’t qualify for a HECM or want something a little different, there’s also FAR’s proprietary EquityAvail option. Described as a “retirement mortgage,” it blends elements of a typical mortgage loan with a reverse mortgage, allowing borrowers to minimize their monthly housing costs as they age.

FAR also offers a home-sharing program called Silvernest. The program matches seniors with rent-paying housemates so they can earn income and put more money toward retirement goals. It can be used in tandem with FAR’s loan offerings.

Pros

• Quick closing times for HECM for purchases

• Hundreds of brick-and-mortar locations

• Good customer reviews and an A+ BBB rating

• Lots of educational resources and tools

• Jumbo loans go down to age 55

Cons

• Does not remain your servicer after closing

• 55+ loans not available in all states

HIGHLIGHTS

Products

HECM, HECM for purchase, jumbo loans

Loan amounts

Up to $4 million

States served

All 50 states, plus D.C.

Why we chose this company: Fairway Independent Mortgage (NMLS #1630898) is one of the most active mortgage lenders in the nation — particularly when it comes to HECM for purchase loans.

The company has focused a lot of its efforts on these loans in recent months, and thanks to its streamlined operations, it can close many in just 17 days. While the company’s overall average is 30 days, that’s still a far cry from the 45 to 90 days most lenders quote — and for seniors on a tight timeline, the quick funding might just be a game-changer.

The company also offers a solid array of online resources (including a reverse mortgage blog, an FAQ section and a reverse mortgage calculator), and on the interest rate front, Fairway’s rates fall somewhere in the middle.

Pros

• Online dashboard for getting and managing your loan

• Dozens of brick-and-mortar locations

• A+ BBB rating

• Lots of online resources, videos and tools

Cons

• No jumbo loans

• No 55+ loans

• Does not service Alaska or Hawaii

HIGHLIGHTS

Products

HECM, HECM for purchase

Loan amounts

Up to $1,089,300

States served

48 states, plus D.C. (not Alaska or Hawaii)

Why we chose this company: If you’re looking for a more tech-driven reverse mortgage experience, Open Mortgage’s (NMLS #2975) online loan platform might be for you.

With Open Mortgage, you get all kinds of educational video content and can start your application process online. While you can’t complete the entire process there (HECMs require counseling through a HUD-approved agency), you can use the platform to run through various loan scenarios and, after closing, manage your loan, connect with customer service or request funds from your line of credit.

According to our analysis of HUD data, Open Mortgage has higher average interest rates than some of the others on our list, though not the highest. Make sure you compare rates from at least a few different lenders to ensure you’re getting the best deal.

Pros

• Great customer ratings and reviews

• Informative website with lots of educational resources

• Specializes in reverse mortgage lending

Cons

• Charged with deceptive advertising practices by the CFPB

• Does not service Massachusetts

• Jumbo loans appear to be discontinued

• No 55+ loans

• No brick-and-mortar locations

HIGHLIGHTS

Products

HECM, HECM for purchase, mortgage refinancing

Loan amounts

Up to HECM limit

States served

49 states (not Massachusetts)

Why we chose this company: Customers are quite happy with American Advisors Group (NMLS #9392), which boasts a 4.5 on Trustpilot.

AAG is the biggest reverse mortgage lender by volume. Most of the customer reviews on Trustpilot (84%) rate their experience highly — either four or five stars. The lender also has a 4.7 out of 5 stars on the Better Business Bureau.

The company offers both standard HECMs and HECMs for purchase, as well as refinancing options for seniors looking to tap their home equity or reduce their mortgage payments.

It’s worth noting that CFPB ordered AAG to pay over $1 million in penalties in 2021 for what the Bureau called “deceptive acts aimed at older homeowners.” The CFPB has more about these allegations on its website. (We are reaching out to both the CFPB and AAG for comment).

Other companies we considered

All Reverse Mortgage

Pros

• Lowest interest rates

• ARLO, a reverse mortgage calculator that offers an instant quote

• Excellent consumer ratings

Cons

• Not available in all states

All Reverse Mortgage (NMLS #13999) would have made our list because it offers some of the lowest interest rates on the market. Its proprietary All Reverse Loan Optimizer (ARLO) software compares different loan products, instantly determines eligibility and provides real-time rate quotes. The company is family-owned and operated and has a nearly perfect five-star rating with the BBB.

Why we didn’t choose it: Its geographic service area — just 16 states — was too small. For consumers in the states it does service (California and Texas, to name a few), the company is worth a look.

American Senior/HighTech Lending

Pros

• HECM, HECM for Purchase and jumbo Reverse Mortgages

• Refinance reverse mortgages available

• Competitive interest rates

Cons

• Not available in all states

• Few independent customer reviews

• Deceptive advertising charges filed by the state of California in 2017

American Senior (NMLS #7147), the reverse mortgage arm of HighTech Lending, offers the standard reverse mortgage options — HECM, HECM for purchase and jumbo loans. Their interest rates are competitive, but other companies offer lower rates. American Senior does offer a loan where you can refinance a HECM loan into another HECM.

Why we didn’t choose it: American Senior might have made the list, but its lack of reviews on Trustpilot and the Better Business Bureau, small reach (just 21 states) and deceptive advertising charges held them back.

Homebridge Financial Services

Pros

• High customer rating on Trustpilot

• Offers lots of educational materials on the pros and cons of reverse mortgages

• Easy online application

Cons

• Reverse mortgage not available in Tennessee or Iowa

• Large number of complaints with the BBB

Homebridge (NMLS #6521) is a lender that offers reverse mortgages, as well as many other loan products, including purchase loans, refinances and home equity lines of credit (HELOCs).

Why we didn’t choose it: Though the company has strong reviews on Trustpilot (4.8 stars), it has a mere one star on the BBB and 74 complaints in the last three years. Their reverse mortgage content and resources were also thin compared to other options we considered.

Liberty Reverse Mortgage

Pros

• HECM and HECM for purchase loans

• Low interest rates

• Easy eligibility calculator

Cons

• Large number of regulatory actions compared to other lenders

• No jumbo loan options

• Not available in New York

Liberty Reverse Mortgage — also called Liberty Home Equity Solutions (NMLS #2726) — was the No. 9 reverse mortgage lender by volume in 2022. The company offers both HECMs and a proprietary jumbo reverse mortgage, which goes up to $4 million and is available for borrowers 55 and up. The lender also offers some of the lowest rates on the market.

Why we didn’t choose it: Liberty’s main drawbacks are due to its parent company — PHH Mortgage/Ocwen — which was recently sued by the state of Florida for servicing failures, including overcharging for property inspections. The company also has 17 regulatory actions against it, according to the NMLS database.

Nationwide Equities Corporation

Pros

• Full range of reverse mortgage options

• Proprietary co-op reverse mortgage option

• Competitive interest rates

Cons

• Available in only 16 states

• A 2021 enforcement action with the CFPB regarding deceptive advertising practices

Nationwide Equities Corp. (NMLS #1408) has solid reviews and a full suite of reverse mortgage options, including HECM loans, HECMs for purchase, jumbo reverse mortgages and refinancing for reverse mortgages. A standout option is the company’s proprietary NY Co-op reverse mortgage.

Why we didn’t choose it: Their small reach (just 16 states), plus allegations of deceptive advertising from the CFPB in 2021 are what pushed the company out of the running.

Reverse Mortgage Guide

Reverse mortgages are complicated products. While they don’t require traditional monthly mortgage payments, they are a debt — and they do need to be repaid eventually.

What is a reverse mortgage?

A reverse mortgage is a type of loan for older homeowners — generally, those aged 62 and up (though some lenders allow borrowers to be as young as 55). It allows borrowers to turn their home equity into cash, which is typically used to supplement retirement income, cover the costs of aging-in-place home repairs or improvement projects or reduce their monthly housing expenses.

How does a reverse mortgage work?

A reverse mortgage essentially advances the money from your eventual home sale. Unlike with traditional mortgage loans and equity products (like cash-out refinances and home equity loans), reverse mortgage holders don’t make monthly payments.

Instead, the lender pays the borrower. The lender will give you that advance via one large payment, many monthly payments or a line of credit. Borrowers can also choose a combination of these payouts.

You can take out a reverse mortgage on a single-family home, a multi-unit property that you currently live in, a townhouse or a condo (with HECMs, it must be an FHA-approved condo). For more details, read Money’s reverse mortgage guide.

You will be required to pay property taxes, homeowners insurance and HOA dues, or your lender could start foreclosure proceedings. To protect its investment, your lender will also require you to maintain the home and keep it in good condition.

Your loan won’t come due until you pass on, sell the home or move out of the home for at least 12 months — to an assisted living facility, for example. In the case of your passing, your heirs would be responsible for repaying the lender out of your estate, or, if that’s not possible, via their own cash or by selling the property.

These loans are best for homeowners with lots of equity who plan to stay in their homes for a while and who have enough income to cover the costs of property taxes, insurance and home maintenance. They’re not ideal if you are struggling financially, think you may move out soon or want to keep your home in the family for generations to come. Make sure you understand all the pros and cons of a reverse mortgage before making your decision.

Types of reverse mortgages

There are four types of reverse mortgages: Home Equity Conversion Mortgages (HECMs), proprietary reverse mortgages and single-purpose reverse mortgages.

Here’s how those differ:

• HECMs: HECMs are reverse mortgages that are insured by the federal government — specifically the Federal Housing Administration — and issued by FHA-approved lenders.

• HECM for purchase: Government-backed loans designed solely for purchasing a home versus leveraging the equity in one you already own.

• Proprietary reverse mortgages: These are private mortgage loans that are unique to the lender offering them. Some lenders call them jumbo reverse mortgages, as they usually have higher limits than HECMs.

• Single-purpose reverse mortgages: The loan proceeds from single-purpose reverse mortgages can only be used toward one specific purpose — like covering home improvements or paying property taxes.

Reverse mortgages can also come with either an adjustable or fixed interest rate. With an adjustable rate, your interest rate can change over time. Fixed rate loans have a consistent rate for the entire loan term.

Reverse mortgage rules

Reverse mortgage qualifications vary by loan program and the lender but typically follow a set of rules.

For HECMs:

• Meet the minimum age requirement of 62

• Have a substantial amount of equity in the home

• The house must be your primary residence

• Complete the mandatory HECM counseling with an independent organization

• Stay current on property taxes, HOA fees and home insurance premiums

For proprietary jumbo loans:

• Meet the minimum age requirement of 55

• Meet lender credit and income standards

• Have enough equity in your home

Selling a house with a reverse mortgage

Like other mortgages, a reverse mortgage uses your home as collateral. So when you sell the home, the loan comes due, and you must use the proceeds to pay off the balance. This is true whether you sell the house or your heir does after you pass.

HECMs and many proprietary mortgage loans have non-recourse clauses. This means that if you default on the loan, you won’t owe more than the sale price of the home.

How to get out of a reverse mortgage

With most reverse mortgage loans, you have what’s called a right of rescission. Legally, this means you have up to three business days after closing to cancel a reverse mortgage and get your money back, including closing costs. You’ll have to notify your lender in writing if you plan to cancel, so make sure to send it via certified mail. This will alert you once it’s been received. (Note: There is no right of rescission with HECM for purchase loans unless your state specifically offers it.)

You can also get out of a reverse mortgage by refinancing — either into a new reverse mortgage loan or into a conventional loan. Follow these mortgage refinance steps if this is a strategy you’re considering.

How to choose a reverse mortgage lender

Choosing the right reverse mortgage lender is critical, so be sure to shop around and consider at least a few options before moving forward.

When choosing a mortgage lender, you should:

• Understand your needs. Think deeply about why you want a reverse mortgage. Is it for a specific purpose, like repairing your house or buying a new home? Or do you need extra cash flow each month to support yourself in retirement? This can point you toward the right type of reverse mortgage loan — and lender — for your goals.

• Get quotes from different lenders. Reverse mortgage companies can differ quite a bit in pricing, so it’s important to get quotes from several to ensure you’re getting the best deal.

• Compare rates and fees. Go through the loan estimates from each lender. Pay particular attention to the interest rate and any origination fees, closing costs, servicing fees and mortgage insurance premiums.

• Read customer reviews and ratings. The Better Business Bureau and Trustpilot are great resources for gauging customer sentiment about a company. Be wary of aggressive sales tactics. Heed these tips for avoiding reverse mortgage scams, and if something feels off or suspicious, report the lender to the Federal Trade Commission and your state’s attorney general.

Reverse mortgage pros and cons

Reverse mortgages can be a handy product in retirement, but they have some notable drawbacks. Here’s a look at both the good and bad for these unique mortgage products.

Pros of reverse mortgages:

• They can increase cash flow: Reverse mortgages don’t require monthly mortgage payments, like traditional loans. This can free up cash flow and ease financial pressures.

• They can supplement your income: Social Security only goes so far. With a reverse mortgage, you can get additional income to support your needs in retirement.

• They’re tax-free: Reverse mortgage proceeds might feel like income, but they’re not taxed as such. The IRS considers them loan proceeds instead.

• They come with protection: Reverse mortgages are non-recourse loans, meaning you’ll never owe more than your home’s worth.

Cons of reverse mortgages:

• There are closing costs: You’ll need upfront cash to cover the costs to originate your reverse mortgage. Financing them is an option, but this means more debt and more long-term interest costs (not to mention, fewer proceeds for you).

• They put your home at risk: When you have a reverse mortgage, you’re required to keep up with property taxes, home insurance and HOA dues. If you don’t, your lender could foreclose on the house.

• They could impact your eligibility for other benefits: If you’re on Medicaid or Supplemental Security Income, taking on a reverse mortgage loan could make you ineligible. Talk to an attorney if you’re concerned your benefits may be impacted.

• They complicate things for your heirs: If you pass on, your loved ones will be left to settle up the balance on your reverse mortgage.

As you can see, reverse mortgages have risks. If you’re not sure one is right for your scenario, talk to a financial professional for personalized guidance. They can help you determine the best way to achieve your retirement goals.

Latest News in Reverse Mortgages and Mortgage Lending

• Seniors looking to relocate or downsize are finding it hard to qualify for a new mortgage. According to a recent study, older loan applicants between the ages of 60 and 69 are 1.54% more likely to be rejected by lenders compared to younger borrowers. The rejection rate increases to 2.7% for applicants over age 70.

• High inflation is pushing the cost of everything up, including the yearly cost of homeownership. A recent survey found that homeowners are spending an average of $17,459 per year on items like utilities, taxes, maintenance, home improvements and insurance — and that’s not counting their monthly mortgage payments.

• While current mortgage rates are higher than they have been in recent years, many Americans believe they haven’t reached their peak yet. In fact, they expect mortgage rates to top 8% within the next year and edge closer to 9% within the next three years. If rates do get that high, the current affordability crisis is likely to be with us for a long time to come.

Reverse Mortgage FAQ

Is a reverse mortgage a ripoff?

Reverse mortgage scams are out there, but they’re not the norm. As long as you understand how these loans work, choose an experienced and vetted mortgage company and use a reverse mortgage calculator to gauge the costs and financial repercussions, a reverse mortgage can be a useful tool for many homeowners. The federal government has also taken steps to protect reverse mortgage borrowers in recent years. In 2021, the CFPB took action against at least two lenders for misleading advertising practices, and HUD also provided extra protections for non-borrowing spouses.

How do you pay back a reverse mortgage?

You pay back a reverse mortgage out of pocket, by selling your home or refinancing the mortgage into a traditional mortgage loan. You may also opt to give the lender the deed to your property. This is typically an option if you’re facing foreclosure.

Remember: Repayment isn’t required until you live outside the home for at least 12 months, pass away or stop making your property tax and insurance premium payments.

How much money do you get from a reverse mortgage?

The amount of money you can get from a reverse mortgage depends on the value of the home and type of loan you get. With a HECM, you can get up to $970,800 as of 2022 (this changes annually). If you opt for a proprietary reverse mortgage, the limits range from $3 million to $6 million depending on the lender. Your credit score, the amount of home equity you have, any existing mortgage balance on the property and the appraised value of your home will also play a role.

How does a reverse mortgage work when you die?

A reverse mortgage comes due when you pass on. This means your heirs will either need to pay off the loan out of pocket, through your estate or by selling the home and using the proceeds from the sale. They usually have 30 days to settle up with the lender, though they may be able to file for an extension of up to one year.

What is the downside of a reverse mortgage?

The biggest downside of a reverse mortgage is that it puts your home at risk of foreclosure if you don’t keep up with property taxes, insurance, HOA dues or home maintenance. Your heirs also stand to inherit less with a reverse mortgage, and there are many costs to consider, too — including interest, mortgage insurance, servicing fees and more. Reverse mortgages can also impact your eligibility for Medicaid and Supplemental Security Income (SSI) — though not Medicare or traditional Social Security benefits.

How We Evaluated the Best Reverse Mortgage Companies

When evaluating reverse mortgage lenders, we considered a variety of factors, including:

• Products offered: We looked for companies with a variety of loan options, including fixed- and adjustable-rate loans, jumbo loans and loans for homeowners under age 62.

• Customer reviews: We favored lenders with strong customer ratings and few complaints.

• Regulatory actions: We favored companies with few regulatory actions against them — particularly actions that pertain to customer service and sales/advertising practices.

• Geographic accessibility: We considered the geographic reach of companies and favored those that serviced the most U.S. states and territories.

• Online presence: We looked for lenders with robust web presences that inform and engage potential reverse mortgage borrowers.

Some of the resources we used when determining our best reverse mortgage lenders include:

• Nationwide Mortgage Licensing System (NMLS)

• Better Business Bureau (BBB)

• Trustpilot

• U.S Department of Housing and Urban Development (HUD) HECM loan data

• Consumer Financial Protection Bureau (CFPB)

• Federal Trade Commission (FTC)

• National Reverse Mortgage Lenders Association (NRMLA)

Summary of Money’s Best Reverse Mortgage Companies of 2023

• Best for low interest rates: Longbridge Financial

• Best for product variety: Finance of America Reverse

• Best for homebuyers: Fairway Independent Mortgage Company

• Best for tech-savvy borrowers: Open Mortgage

• Best customer service: American Advisors Group

 

© Copyright 2023 Money Group, LLC. All Rights Reserved.
This article originally appeared on Money.com and may contain affiliate links for which Money receives compensation. Opinions expressed in this article are the author’s alone, not those of a third-party entity, and have not been reviewed, approved, or otherwise endorsed. Offers may be subject to change without notice. For more information, read Money’s full disclaimer.