Best Reverse Mortgage Lenders of 2023
We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.
Fact Checked: Cadeem Lalor
Updated: June 01, 2023
We adhere to strict standards of editorial integrity to help you make decisions with confidence. Please be aware that some (or all) products and services linked in this article are from our sponsors.
With the cost of living increasing so dramatically, many seniors and older Americans are worried about retirement and whether or not their golden years will go as planned. Does this sound like you? Do you have a lot of equity in your home? Then a possible solution is a reverse mortgage.
While not for everyone, a reverse mortgage could be a handy financial tool that allows you to stay in your home longer and enjoy your retirement. Here are our top five picks for the best reverse mortgage companies.
Longbridge Financial
Quick Facts
Loan limit: $4,000,000
Available in all states: No
Best for low interest rates/fees
Longbridge Financial is a reverse mortgage company that is 100% online, which means there are no in-person support options. However, don’t let that fool you. Their reputation for customer service is still top-notch and they maintain an A+ reputation with the Better Business Bureau.
Longbridge Financial specializes in reverse mortgages only and offers three different product options; a HECM reverse mortgage, a HECM for purchase reverse mortgage for those looking to buy a home that better fits their needs, and platinum mortgage for homeowners aged 55+ who own a higher-value home or condo.
Longbridge Financial is available in 49 states (not Hawaii) and offers loan amounts up to $4,000,000. Despite the lack of in-person support, the website is fully loaded with materials, including a free information kit for those looking to educate themselves on reverse mortgages and how they work. When it comes to fees, Longbridge Financial charges origination and service fees. Origination fees are basically fees an organization charges customers for taking out a loan, and some of Longbridge’s programs may allow you to waive this fee. Lastly, military veterans and service members can take advantage of a $500 discount.
Despite these standard costs, Longbridge does not charge HECM borrowers a servicing fee. This can save you upwards of $35 a month.
American Advisors Group
Quick Facts
Loan limit: $4,000,000
Available in all states: Yes
Best for ease of qualification
Perhaps the best-known option for reverse mortgage products is American Advisors Group. This is a national reverse mortgage company that offers its products in all 50 states.
American Advisors Group offers several types of reverse mortgage loans including lump-sum payouts, a growing line of credit, jumbo loans (up to $4,000,000), term or tenure, and reverse for purchase loans. If you are unsure of which one will work best for you and your needs, you can get in touch with an American Advisors Group equity solutions specialist, who will help explain all the options to determine which one is the best fit for you. The ability to chat with a specialist makes it easier to know what you can qualify for and is something that makes this company stand out.
However, you pay the price (literally) for the nationwide access and support options. The fees can be a bit higher than some of the competition so do your research and ask questions as they may waive the service fee to help lower costs.
Finance of America Reverse
Quick Facts
Loan limit: $4,000,000
Available in all states: Yes
Best for product variety
When it comes to product variety, Finance of America Reverse takes the top spot for all of its options. These include HECM, HECM for purchase, jumbo loans, Equity Avail property mortgage, and home-sharing.
The diversity of these products means that there is something for everyone. Individuals who perhaps can’t qualify for a traditional HECM can look at the proprietary EquityAvail option. Finance of America Reverse describes it as a “retirement mortgage” and it allows borrowers to keep their monthly housing costs lower with age. The home-sharing option, which is called Silvernest, will match senior homeowners with renters to allow them to earn an income to help supplement their retirement goals.
Finance of America Reverse is available in all 50 states and offers a few of its products to individuals as young as 55, which is quite a few years younger than most other reverse mortgage products allow. Keep in mind that the age limits and products may vary by state.
Loans are available up to $4,000,000 and rates are very competitive, and include a price match guarantee. There are not many brick-and-mortar locations, but Finance of America Reverse has excellent ratings and reviews when it comes to customer service both over the phone and online via email.
Mutual of Omaha
Quick Facts
Loan limit: $4,000,000
Available in all states: No
Best for online options
A reverse mortgage is just one of the many products offered by Mutual of Omaha Bank, and their 4.3 review rating on TrustPilot indicates that the reverse mortgage product is top-notch. Clients also compliment the helpful staff, smooth process, and easy-to-use app and website.
Mutual of Omaha Bank offers four different products for reverse mortgages. These are; a HECM reverse mortgage, HECM for purchase and refinance loans. A big advantage that Mutual of Omaha has over other reverse mortgage companies is that their HomeSafe reverse mortgage product allows qualifying homeowners to borrow up to $4,000,000 which is significantly higher than the HECM limit.
For those ready to learn more you can visit the website or app where you will have access to further information, including a free reverse mortgage loan guide. When you are ready to apply you can do so easily online or even via the app.
Mutual of Omaha reverse mortgage products are available across the U.S. in all states except for New York and West Virginia.
Another lender we considered
Liberty Reverse Mortgage
Quick Facts
Loan limit: Not listed
Available in all states: Yes
Liberty Reverse Mortgage has been around since 2004 and is considered to be one of the most experienced reverse mortgage companies when it comes to HECM. Since its inception, the company has helped more than 50,000 senior homeowners with reverse mortgages. Liberty Reverse Mortgage is licensed in all 50 states and is rated an A+ accredited business by the Better Business Bureau.
Liberty Reverse Mortgage offers two reverse mortgage products. The first is the standard HECM. The second is HECM for purchase. Fees and costs will depend on the state in which you reside. The fees include FHA Mortgage insurance, origination fees, and appraisal fees. That being said, they are quite competitive when it comes to costs and working directly with Liberty Reverse Mortgage means you can benefit from the Liberty Iron Clad Guarantee, which will match or beat a competitor’s offer.
One thing to be aware of is that Liberty Reverse Mortgage has very strict eligibility requirements compared to other reverse mortgage lenders. In order to qualify you will require a minimum credit score of 620. To compare, most other reverse mortgage lenders have no credit score requirement.
Despite some good features, Liberty failed to make the list due to a history of alleged violations of regulations. One such allegation includes a charge by the state of Minnesota for using an unlicensed loan processor to provide funds.
What is a reverse mortgage?
A reverse mortgage is a financial product that is available to individuals aged 62 or above who have high equity in their own but find themselves in need of some cash. Instead of taking out a personal loan or using credit cards, you can take out a reverse mortgage to gain access to cash for whatever you need, such as living expenses, medical bills, or even paying off the remainder of your mortgage. While reverse mortgages can be very handy, they do also come with quite a bit of risk.
More: Guide to getting a reverse mortgage
Types of reverse mortgages
When you’re considering a reverse mortgage, there are a few products that you should be aware of.
Home Equity Conversion Loans (HECM): These loans are insured by the Federal Housing Administration (FHA). For 2023, the loan limit is $1,089,300.
Proprietary reverse mortgages: These loans are offered through individual lenders, and are not insured by the federal government. Generally these loans are available if you have a higher value home. You may be eligible for a loan of up to $4 million.
Single-purpose reverse mortgages: Your state or local government may offer single-purpose reverse mortgages. You must specify the purpose of the loan, and only use it for that. These loans are not federally insured.
Reverse mortgage
Pros
- Can help you stay in your home longer
- If you are cash poor but home-wealthy, then a reverse mortgage can help secure your retirement
- Reverse mortgages can be used to pay off your existing home loan
- Funds from reverse mortgages are not taxed as it is considered to be a loan advance rather than income
- Protection is in place should the value of the home end up lower than the total amount owed on the reverse mortgage
Cons
- The home needs to be your principal residence for the majority of the year so you can’t live somewhere else
- Reverse mortgages are costly. There are a number of expenses associated with a reverse mortgage, including an upfront insurance premium and origination fees.
- If you default on your reverse mortgage, you could lose your home
- Having a reverse mortgage could impact your retirement benefits
- Reverse mortgages are not a good idea if you want a heir to inherit the home
- Overall can be a very risky product
Choosing the best reverse mortgage lender
Shopping for a reverse mortgage can be intimidating, but here are a few tips and things to keep in mind to better help you choose the right reverse mortgage company.
Credentials: Getting a reverse mortgage is a big deal that comes with a number of fees and some risks. If you are doing it, you want to make sure you do it right. When shopping around for a reverse mortgage lender look at the company's professional credentials. You want a lender that is FHA and HUD approved. It’s also a good idea to work with a reverse mortgage lender who is an active member of the National Reverse Mortgage Lenders Association (NRMLA).
Reviews: While credentials are important, so are good reviews. Yes, you want someone with professional knowledge, but you also want someone who prioritizes your needs and interests. So, take the time to read reviews or even get feedback by word of mouth. If you are looking online, stick to third-party sites that don’t accept sponsored reviews. Websites such as Yelp, Google, Trustpilot and the Better Business Bureau are good resources for honest feedback.
Interest rates and fees: A reverse mortgage is not free and comes with a number of various fees on top of interest, such as origination fees and closing costs. The goal here is to get access to more money, not to spend a lot. So you will want to shop around and compare the interest rates and fees charged by various lenders to find the best fit for you. Make sure you are aware of all upfront costs before committing.
Reverse mortgage fees
Like all loans, the costs associated with a reverse mortgage are dependent on the type of loan you get and the lender you choose.
Be aware that with a reverse mortgage, the principal amount you owe will grow over time.
No matter what type of reverse mortgage you take out, you can expect some standard fees.
Reverse mortgage counseling: Before getting a Home Equity Conversion Mortgage (HECM) reverse mortgage loan, you must receive counseling from an HUD-approved agent. The agent will make a determination of your ability to pay back a loan based on a number of criteria. You may be charged a fee of around $125, but this might be waived.
Loan origination fee: These fees are paid to the lender, and are capped at $6,000. For the first $200,000 of home’s appraised value, a fee of $2,500 or 2%, whichever is higher, will be charged. For the amount above $200,000, you will be charged an additional 1%.
Initial mortgage insurance premium (MIP): You will be charged both an initial and annual mortgage insurance premium by your lender. These fees go to the FHA, and guarantee that you get your loan advance. This fee is 2% of $1,089,300, which is the maximum lending limit for a reverse mortgage for a HECM. Alternatively, the fee can be 2% of the property’s value at the time of closing, whichever is less.
Closing costs: These fees vary depending on the third-party you are using. These costs include things like the appraisal fee, title search, credit checks, state mortgage taxes and additional fees. These fees are also dependent on the value of the home, its location, and other such factors. It is possible to have closing costs rolled into your reverse mortgage amount.
Reverse mortgage FAQ
Methodology
Product rankings are determined by the Moneywise editorial team and are based on factors and features that everyday users care about most. We adhere to strict standards of editorial integrity to help you make decisions with confidence. The products and companies featured in this article were independently selected, but please be aware that some products and services linked in this article are from our sponsors.
Moneywise rates products and services on a sale of 1 to 5 stars, where 5 stars is the best rating possible. Ratings are rounded up to the nearest 0.5 of a star.
Our rating system is based on the factors that mean the most to the everyday user. These factors include:
- Loan amounts
- Minimum credit score
- Number of states operating in
- Ease of application
- Fees and other charges
- Additional features
We collect data from providers' websites, by using the services and watching demonstrations as required. The data is analyzed and the result is a star rating. Each factor is weighted depending on the category in which the product is being evaluated, in order to ensure it meets the needs of different users.
Our goal is to provide an independent review, and give you the information you need to make a decision on which service is best for you.
