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The Best Reverse Mortgage Companies of 2020

With rising housing prices and a population that has in general put away little for retirement, it is no surprise that reverse mortgages are becoming more popular. These loans are lauded as the best thing since sliced bread, but the truth is that there are plenty of scams and shady practices even among widely advertised lending firms.

The reviews of the best reverse mortgage companies that you’ll find below are our way of shining some light on the firms that are most deserving of praise. They represent the culmination of detailed research and hard work that went into testing the services of these companies, with all the good and not-so-good features exposed for you to see.

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Fortunly’s Top 3 Reverse Mortgage Picks

Top 3 Picks

Finance of America Reverse

Highly customizable loans

Experienced loan originators

Extremely high customer satisfaction

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American Advisors Group

Excellent customer service

Available nationwide

Highly experienced loan originators

Learn More READ REVIEW

Liberty Home Equity Solutions

Unique guarantee system

Great customer support

Nationwide coverage

Learn More READ REVIEW

Top 5 Reverse Mortgage Companies

1. Finance of America Reverse

Highly customizable loans

Experienced loan originators

Extremely high customer satisfaction

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Finance of America Reverse provides the finest customer service on the market. The company stands toe-to-toe with the leading lenders in America. Featuring a great selection of loans and showing a clear focus on live interaction with experienced mortgage specialists, it is a company that puts effort to make sure you make the choice that suits your needs.

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Loan types offered

Fixed-rate HECM, adjustable-rate HECM, HECM for purchase, proprietary reverse mortgage

Loan disbursement options

Lump sum, monthly disbursements (tenured), line of credit, combinations of the above

BBB rating

A+

ConsumerAffairs rating

2. American Advisors Group

Excellent customer service

Available nationwide

Highly experienced loan originators

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AAG is not only the largest, but also one of the most-respected companies for reverse mortgages. This is a world-class company with nationwide coverage and hundreds of experienced employees who keep it at the very top of what the market has to offer.

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Loan types offered:

HECM traditional, HECM for purchase, HECM refinance, proprietary reverse mortgage

Loan disbursement options

Lump sum, monthly disbursements (tenured), line of credit, some combination of the above

BBB rating

A-

ConsumerAffairs rating

3. Liberty Home Equity Solutions

Unique guarantee system

Great customer support

Nationwide coverage

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Liberty Home Equity Solutions is not just another mortgage lender among many. It is a great company with the most complete guarantee offer anywhere on the market - and a level of customer trust that’s rarely found among its competitors.

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Loan types offered

Standard HECM, HECM for purchase, trial proprietary reverse mortgage In some states

Loan disbursement options

Lump sum, monthly disbursement, line of credit

BBB rating

A+

ConsumerAffairs rating

4. One Reverse Mortgage

HELO reverse mortgage option

Transparency with fees and costs

World-class service

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One Reverse Mortgage is easily one of the better online mortgage lenders, providing not only great service, but also leading the way in innovative loans. With its very own HELO reverse mortgage, nationwide coverage and a dedication to user-friendly, privacy-respecting practices, the company is at the top of its game.

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Loan types offered

Adjustable-rate HECM, fixed-rate HECM, HECM for purchase, proprietary HELO reverse mortgage

Loan disbursement options

Lump sum, monthly disbursements (tenured), line of credit, some combination of the above

BBB rating

A+

ConsumerAffairs rating

5. Longbridge Financial

HELO reverse mortgage option

Transparency with fees and costs

World-class service

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With Ivy League leadership and investments from Federal Reserve veterans like Alicia M. Munnell, Longbridge Financial is slowly but surely climbing to the very top of what the reverse mortgage industry has to offer.

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Loan types offered

Standard HECM, HECM for purchase, proprietary Platinum mortgage, Gold program

Loan disbursement options

Lump sum, monthly disbursements (tenured), line of credit, some combination of the above

BBB rating

A+

ConsumerAffairs rating

6. Lending Tree

Excellent for comparing rates

Easy to use and accessible

Fastest way to get contacted by lenders

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Lending Tree is a great choice for potential borrowers who are looking to compare multiple reverse mortgage providers. The quality of service here is so solid that even though the company is not a direct lender, it still more than deserves to be listed among the industry leaders and be considered one of the better mortgage brokers on the market.

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Loan types offered

Serves as a broker, therefore offers all the loan types from lenders featured on the website

Loan disbursement options

Same as above: all disbursement options are present, depending on the lender

BBB rating

A+

ConsumerAffairs rating

7. Homebridge

Nationwide coverage

Wealth of useful information

Variety of HECM loans

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Homebridge has definitely earned a spot among the top reverse mortgage lenders in the US, even though it has only been in the reverse mortgage business for a few years. This company was dedicated to becoming a generational lender, and by providing reverse mortgage loans it finally completed its goal, offering loans for every stage of life.

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Loan types offered

Standard HECM, HECM for purchase

Loan disbursement options

Lump sum, line of credit, monthly disbursement, combination of the above

BBB rating

A

ConsumerAffairs rating

8. Reverse Mortgage Funding

Great proprietary loan

Live chat customer support

Nationwide coverage

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Even as a relative newcomer, Reverse Mortgage Funding can already be listed among the premiere home mortgage lenders with the highest quality of service. Add to this a great proprietary reverse mortgage loan, nationwide coverage, and ever-improving customer support, and Reverse Mortgage Funding is a solid choice for any borrower - one of the top lenders in the U.S.

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Loan types offered

Standard HECM, HECM for purchase, Equity Elite proprietary mortgage, Equity Elite Zero proprietary mortgage

Loan disbursement options

Lump sum, line of credit, monthly disbursemen

BBB rating

A+

ConsumerAffairs rating

N/A

How Do We Determine the Best Reverse Mortgage Companies?

Plenty of lenders offer reverse mortgage loans, but most can’t meet the standards set by the industry’s top firms. We believe that there are certain key features that lenders should and must possess. We have identified those features and use them as the basis for our reviews:

Loan Options

The best mortgage lenders offer potential customers as wide an array of choices as possible when it comes to loan options and the way that disbursements are paid out. Customer-friendly practices are important, and lenders that give borrowers more choices deserve to be featured here.

Pricing & Discounts

There are many different reverse mortgage fees and charges. Even though the costs are somewhat regulated by the government, you can definitely save money by picking a lender wisely – which is exactly why our list includes only those companies that offer the best and most competitive deals to borrowers.

Discounts and bonus offers make the best rated mortgage lenders even better. A company that is committed to providing more for less will always earn a place in our reviews.

Customer Experience

Quality service and support are essential. Reverse mortgage loans are not simple. Companies that take time to present clear and important information to potential customers deserve special praise. Our overall ratings are influenced by the quality of the vendor’s customer support as well as how much lenders work with borrowers to guide them through the process of taking out a loan.

Operating since 2003, Finance of America has become one of the premiere reverse mortgage firms in the US. The Oklahoma-based company operates in 43 states and Puerto Rico. It is a member of NRMLA, the National Reverse Mortgage Lenders Association.

Loan Options

There are two major reverse mortgage solutions at Finance of America Reverse LLC. The most popular is the HECM loan, which is available in all 50 states and Puerto Rico. The limit on the HECM loan is $636,150 or the value of the home, whichever is less.

The other option targets homes with values that are higher than the limits for HECM loans. Finance of America calls this proprietary jumbo loan HomeSafe reverse mortgage. It allows homeowners to borrow up to $2.25 million. HomeSafe loans are not federally insured as HECM loans are, but they do qualify as non-recourse loans.

This jumbo loan includes mortgage insurance premiums, making the total cost of the reverse mortgage lower. The downside with HomeSafe is that the government does not cover the excess loan value of the home after it is sold, and unlike HECM reverse mortgages, the borrower or heirs will be responsible for the difference.

Whichever option you choose, you can expect Finance of America to close the loan in 30 days in most cases.

Pricing & Discounts

When it comes to pricing, Finance of America Reverse mortgage shows a level of versatility that you simply cannot find with other lenders. The company provides five versions of its HomeSafe proprietary reverse mortgage for purchase, the widest variety of options you’ll find anywhere.

The HomeSafe loan comes in Standard, Flex, For Purchase, Second, and Select versions, with the biggest difference being how funds are disbursed. HomeSafe Standard and Second are built for lump sum payments, while the HomeFlex loan is for those who are willing to pay 60% of the loan upfront, with the remaining 40% paid out over the next five years.

Finance of America allows you to close the loan without any out-of-pocket costs, depending on your financial situation. Origination fees will cost you between $2,500 and 6,000, while reverse mortgage interest rates can be fixed or variable.

Customer Experience

Finance of America Reverse follows a traditional path in customer service, with a preference toward mail and real live loan originators who will guide you through the process. The contrast with an ever-more-online industry is obvious; it is not surprising that the company has an A+ rating with the BBB and just 57 complaints on the Consumer Financial Protection Bureau website.

It also sets itself apart from other mortgage companies with a website that makes it easy to access valuable learning resources while also providing helpful articles about retirement living. There is even a retirement personality quiz to help you decide the product best suited to your needs, plus a nice reverse mortgage calculator that provides very detailed projections for various loan options.

Final Words

Finance of America Reverse is, in our opinion, providing the highest quality of service on the market. It stands toe-to-toe with the largest lenders in the US. Featuring a great selection of loans and a clear focus on live interaction with experienced mortgage specialists, it is a company that puts effort to make sure you find the loan that is suited to your needs.

This is as professional a lender as we have ever seen, and even though there are some quirks here and there (such as having to give up a lot of personal information to calculate your potential reverse mortgage), it is definitely one of the very top mortgage companies in 2019.

Reasons to buy

Highly customizable loans

Experienced loan originators

Extremely high customer satisfaction

AAG was founded in 2004 by Reza Jahangiri in Orange County, California, with a goal of helping homeowners aged 62 and older live a more financially stable life in retirement. Since then, the company has become the largest reverse mortgage lender in the US, the only one operating in all states nationwide. With a market share of 31.66% and multiple awards – including BBB’s Torch Award for Ethics in December 2017 – AAG has proven it belongs right at the top.

Loan Options

American Advisors Group is a powerhouse in the reverse mortgage industry, so it is not surprising that the company offers an extensive list of loans. The most common HECM reverse mortgage can be signed on an adjustable or fixed rate, with a maximum home value of $679,500. There is also the HECM for purchase loan, which lets senior homeowners buy a new home and make a reverse mortgage purchase in the same transaction, all while paying only one set of closing costs.

The AAG Reverse Mortgage Finance loan is designed for refinancing your existing reverse mortgage with a better interest rate and access to increased equity due to appreciating property value. There is also a Single-Purpose Reverse Mortgage that can cover issues like property taxes and house repairs.

AAG is one of the few lenders that feature jumbo loans. With limits high as $6 million, AAG is ideal for homeowners with substantial home equity. These Jumbo Reverse Mortgage loans are backed by banks and private lending companies. This means that they are not insured by the FHA, so it is best to be as prepared and as informed as possible.

Pricing & Discounts

This is one place where AAG does not offer anything out of the ordinary – and where it has plenty of room to grow. The only discount, if we can call it that, is that the company will not charge you a service fee throughout the entire duration of a HECM loan. AAG also does not advertise any rebates, maximum caps or price matching, so you have to contact them for an estimate.

The fees that will pay are divided into those that you pay upfront and those that are rolled into the loan. Like other mortgage lenders that provide HECMs, AAG charges loan origination fees of $2,500 to $6,000 depending on the value of your house. Insurance stays at a government-mandated 2% of your loan amount. Title insurance varies by region but other than that, you can expect to pay about $1,000 on all the other fees: courier charges, appraisals, credit reports, surveys, pest inspections, and other costs.

Customer Experience

AAG is the largest of all the top mortgage lenders, and it has a great record when it comes to customer satisfaction. BBB gives the company an A- rating, with most reviews praising fast closings and experienced employees. The company website makes it easy to find valuable information, but there are not many online tools for borrowers other than a mortgage estimate calculator.

American Advisors Group customer service is top-notch. You can expect to speak to highly professional and knowledgeable support staffers. You’ll find a detail-packed FAQ at the website too.

Final Words

AAG is not only the largest, but also very clearly one of the leading companies for reverse mortgage loans. This is a world-class organization with nationwide coverage and hundreds of experienced employees. It is sure to remain a top contender for years to come.

Reasons to buy

Excellent customer service

Available nationwide

Highly experienced loan originators

Established in 2004, Liberty Home Equity Solutions Inc. is one of the biggest lenders in the US. The company operates in 49 states and has so far served up more than $7.5 billion to more than 64,000 senior homeowners. It is consistently among the highest rated reverse mortgage companies in the country.

Loan Options

While most lenders feature a variety of home loans, Liberty Home Equity Solutions is completely focused on reverse mortgages. For the longest time, the company offered only two HECM loans: standard HECM and HECM for purchase. As of this summer, Liberty has started rolling out a proprietary mortgage service in order to keep up with the other large mortgage companies, so you can expect to see a Liberty jumbo loan offer in your state in the near future.

A standard HECM loan can be used to pay off existing debts or boost your retirement savings, while HECM for purchase loans are available to buyers of single-family homes and FHA-approved condominiums and manufactured homes. You can choose a lump sum, monthly disbursement, or line-of-credit reverse mortgage, and you can expect your HECM loan to be closed 30 to 45 days after signing.

Pricing & Discounts

Closing costs and some fees vary depending on your state, but other reverse mortgage requirements and costs are set in stone by HUD and FHA regulations. The origination fee is capped at $6,000, and mortgage insurance at $13,593. Liberty’s title, settlement, and closing costs follow industry norms.

What makes Liberty Home Equity Solutions reverse mortgage loans stand out from the competition, however, is the company’s Iron Clad Guarantee. It can save you money on fees – and even get you better terms – if you work directly with the company instead of one of its affiliated partners.

This is one of the most interesting reverse mortgage deals you’ll find, as Liberty promises to beat or match a competitor’s reverse mortgage offer and close the loan in 60 days or give you a $100 Visa gift card. If more than 60 days pass before Liberty Home Equity Solutions closes the loan, the company will also reduce closing costs by $500 – but this discount applies only to HECM standard loans.

You can complete the entire application process from your home, changing your mind or stopping any time before the loan is funded.

Customer Experience

Liberty Home Equity Solutions holds an impressive A+ rating with the BBB, with only two complaints listed in the past three years. It is also highly rated on ConsumerAffairs, with 4.5 out of 5 stars from 1,205 customer reviews, making it one of the premiere reverse mortgage companies when it comes to customer satisfaction.

The company’s website is straightforward and simple to use, with most of the important information just a click away. It is not a particularly flashy site, but it does not need to be.

If you are working directly with Liberty Home Equity Solutions and the Iron Clad Guarantee, a team of experts will guide you through the loan process and update you weekly. You can call an agent during business hours with questions. The top-notch support makes the company stand, even against the rest of the leading reverse mortgage companies.

Final Words

Liberty Home Equity Solutions is not just another mortgage lender. It is a great company with the most complete guarantee offer anywhere and a level of customer trust that’s rarely found among lenders. It will be extremely hard for anyone to knock Liberty off the top spot.

Reasons to buy

Unique guarantee system

Great customer support

Nationwide coverage

Based in San Diego, California, and operating for nearly two decades, One Reverse Mortgage LLC is an industry leader and a member of the National Reverse Mortgage Lenders Association. In 2008, the company was purchased by the owner of Quicken Loans, which only made One Reverse an even stronger and better-known brand. It is now consistently rated among the most trusted lending companies in the US, and that reputation is exactly what we want to put to the test today.

Loan Options

One Reverse Mortgage features HECM products that are insured by the Federal Housing Authority. This means that you won’t find any standard loan options that are insured by third parties, which may limit the number of choices but ensures that each loan is insured by the government. One Reverse Mortgage offers adjustable rate HECM, fixed rate HECM and HECM for purchase loans.

What makes One Reverse stand out among the leading reverse mortgage lenders is its Home Equity Loan Optimizer, or HELO. The company launched it in late 2018 with the idea of providing a reverse mortgage option for those seniors excluded by the property restrictions set by the HUD.

HELO loans allow higher limits of up to $4 million per loan, and don’t require mortgage insurance. These loans also allow for debt consolidation at closing, which is not available with HECMs. What’s more, with HELO there are no property restrictions of any kind, so you can use it for non-FHA approved condominiums and other properties.

HELOs also have some restrictions that you will not encounter with HECM reverse mortgage solutions. For instance, the minimum credit score to qualify for a HELO is 640, and non-borrowing spouses cannot be listed on the loan. If you are considering a HELO, you should be aware that the minimum value of your property must be at least $350,000, and if it exceeds $2 million, two appraisals will be required.

Pricing & Discounts

Seeing as One Reverse Mortgage offers FHA-approved HECMs, the fees and closing costs that you pay as a borrower do not differ much from one lender to the next. The minimum origination fee is a standard $2,500, which can climb to $6,000, depending on the value of the property you are buying. Other fees for servicing, appraisal, and escrow are all standard. They are usually rolled into the loan.

Customer Experience

One Reverse Mortgage is one of the top reverse mortgage lenders in 2019 when it comes to customer support and overall user experience. Because the company doesn’t have brick-and-mortar branches, all loan applications are made online, which puts a lot of pressure on the website to support customers well. It does.

For starters, the One Reverse Mortgage site is filled to the brim with useful information and transparency that are rarely found in the mortgage business. You get a much clearer look into the exact fees and costs that come with a reverse mortgage, as well as a user-friendly mortgage calculator that does not require as much personal information as you must provide at other vendors’ sites.

Add to this an excellent and knowledgeable staff that will guide you through the whole process and you have a recipe for success – which is reflected in the company’s BBB A+ rating and a 4.47/5 score from online customer reviews.

Final Words

One Reverse Mortgage easily ranks among the premiere online mortgage lenders, providing not only a great service, but also leading the way in innovation when it comes to the types of loans that are offered. With its very own HELO reverse mortgage, nationwide coverage, and a dedication to user-friendly, privacy-respecting practices, the company is at the top of its game.

Reasons to buy

HELO reverse mortgage option

Transparency with fees and costs

World-class service

This New Jersey reverse mortgage lender has been operating since 2012. It has a positive reputation for the quality of its online service, which is almost unmatched on the market. With Ivy League-level leadership and a highly experienced staff, Longbridge Financial LLC is quickly rising to fulfill its potential and become the leading reverse mortgage lender in the US.

Loan Options

Longbridge Financial offers a great range of HECM loan options while also providing its own proprietary loan called Longbridge Platinum. For standard HECMs, you have adjustable and fixed-rate options for lump-sum or term disbursement, along with tenure and line-of-credit reverse mortgages.

The Longbridge Platinum proprietary loan has a maximum amount of $4 million. Like other jumbo reverse mortgages, it is not backed by the FHA. It is available in 17 states.

This Platinum jumbo loan was meant as the first in a line of options that Longbridge will offer customers in the near future, so it is possible that you will soon find the company making even bigger home loans. These non-FHA loans put all the responsibility on the borrower for the full amount of the loan when it comes due, so it is best to approach them with complete knowledge and plenty of preparation.

Longbridge Financial features a Gold program for borrowers who meet certain requirements like credit scores of at least 660. This program has the lowest mortgage rates and fees, and it excludes manufactured homes.

Pricing & Discounts

Longbridge Financial does not stand out from the competition when it comes to pricing, as it follows industry trends for both the proprietary mortgage and government-mandated fees regarding HECM loans. The origination fee is limited to $6,000 and the mortgage insurance rate premium is the normal 2%. Other closing costs and fees are on par with industry norms.

Customer Experience

What it lacks in discounts and information regarding reverse mortgage fees, Longbridge more than makes up for with quality of service. The website is probably the most well-designed on our list, and the Longbridge reverse mortgage calculator is the most robust in the entire industry. Details like this cement Longbridge’s place among the top 5 reverse mortgage companies in 2020.

Longbridge’s customer guarantee includes a pledge to inform people if a reverse mortgage is not the right option for them financially, plus a promise to try to close every mortgage within 45 days of receiving the application and HUD-approved counseling certificate. With such great dedication to customer service, it is no surprise that the company holds an A+ rating from the BBB and just one complaint on record in the Consumer Financial Protection Bureau database.

Final Words

With Ivy League leadership and investments from Federal Reserve veterans like Alicia M. Munnell, Longbridge Financial is slowly but surely climbing to the very top of the reverse mortgage industry. The company already operates in 47 states, has an impressive website and even better customer service. All of this outshines any lack of openness regarding mortgage fees.

This is certainly not the largest lender in the nation. It’s not even in the top 10 when it comes to the number of closed deals, but that only makes the fact that Longbridge managed to rank among the top 5 that much impressive.

Reasons to buy

HELO reverse mortgage option

Transparency with fees and costs

World-class service

Lending Tree was established in 1996 in North Carolina. It has been a licensed online mortgage broker since 2013. The company serves as a loan aggregator that helps borrowers connect with home loan and reverse mortgage providers so they can compare mortgages side-by-side. It is a true one-stop shop for any kind of a loan.

Loan Options

Lending Tree is a famous marketplace for financial loans of all types, and it partners with some of the largest reverse mortgage lenders in the US. This approach makes Lending Tree a unique player, as the company is not a lender. It is, instead, an excellent place to compare the rates from all the lenders on the market. It also makes sure that borrowers are contacted by lenders, which is great if you are not bothered by calls and emails from multiple companies.

Some of the lenders that you will find on Lending Tree are American Advisors Group (AAG), Community First National Bank, Finance of America, Live Well Financial, Responsible Reverse Mortgage, Ruoff Mortgage Company, and United Mortgage Corporation.

Pricing & Discounts

Lending Tree isn’t a reverse mortgage broker company, so it won’t charge you directly for anything. It makes its money from selling the reverse mortgage loan to third parties, meaning that your costs are determined by the lender that you choose. What’s more, Lending Tree does not allow any of its lenders to charge upfront fees to guarantee or insure a loan.

Customer Experience

Because of the way that Lending Tree works, the quality of its service has to be the whole focus of the company’s website. And it really does a good job with that, providing an easy-to-use interface with an extensive supply of tools and resources for customers interested in finding the right mortgage lender.

The biggest issue that Lending Tree currently has is that it cannot actually control how partner lenders will treat borrowers coming from the Lending Tree website, so any issue with employees from those companies reflects badly on the broker. Even so, Lending Tree has a positive rating from its customers, with 82% of them giving the company an “excellent” rating on TrustPilot.

The Better Business Bureau also rates Lending Tree highly with an A- rating, while ConsumerAdvocate gives it a 9.2/10 score, noting that Lending Tree has had only two regulatory actions against it.

Final Words

Lending Tree is a great choice for borrowers who are looking to compare reverse mortgage providers and find the one suited to them. The quality of service is so solid that even though the company is not a direct lender, it still deserves to be listed among the industry’s leaders as one of the  mortgage brokers.

Reasons to buy

Excellent for comparing rates

Easy to use and accessible

Fastest way to get contacted by lenders

Homebridge Financial Services Inc was founded in 1989 with the idea of becoming a “generational lender” that can provide you with loans at any stage of your life: from your first loan all the way to a refinance reverse mortgage to fund your retirement. In 2016, the company acquired Prospect Mortgage and became one of the largest nonbank lenders in the US.

Loan Options

Homebridge Financial focuses on HECM mortgages and features a great range of loan options. The company provides reverse mortgages for single-family homes, condos and townhouses, and manufactured homes that meet FHA requirements. What’s more, like other top reverse mortgage lenders, Homebridge is also a nationwide firm, meaning that you can apply for a reverse mortgage in any US state.

You can choose a tenured, line of credit, or HECM for purchase loan, with fixed-rate lump-sum disbursement or adjustable-rate term disbursement. There is also an option for a combination loan that can be a mixture of all the above, at an adjustable rate.

Pricing & Discounts

Homebridge is a pure HUD reverse mortgage lender that focuses only on government-insured loans, so costs like origination fees and mortgage insurance premiums are tightly regulated and must follow industry standards. The reverse mortgage limit at Homebridge is $679,650, and origination fees are typically under the $6,000 limit.

The company requires you to pay the mortgage insurance premium upfront, while expenses like appraisals and inspection fees can be rolled into the borrowed amount. Homebridge Financial Services does a good job of explaining just how much each of these expenses and fees will cost you, and all of these details are available right on the website.

Customer Experience

The quality of customer service does not end with transparency about prices and reverse mortgage interest rates, however. The fact is that Homebridge has one of the better looking websites of any lender, with a treasure trove of useful information to help you understand reverse mortgages better. And if you have any trouble finding the things you are looking for, you can always contact the helpful support staff.

It is not surprising, then, that Homebridge Financial customer service receives good reviews, with only one complaint regarding reverse mortgages filed in the Consumer Financial Protection Bureau database. The company has an A rating from the BBB and is considered to be financially stable.

Final Words

Even though Homebridge Financial has only been in the reverse mortgage business for a few years, the wealth of experience that the company has amassed is evident. This service was the last remaining piece of the puzzle to complete Homebridge’s goal of being a lender that can serve you in all stages of your life, and we can confirm that it has succeeded. Some quirks and issues with more up-to-date information on the website aside, Homebridge is easily among the top reverse mortgage lender firms in the US.

Reasons to buy

Nationwide coverage

Wealth of useful information

Variety of HECM loans

Reverse Mortgage Funding LLC is a relative newcomer to the market, but in the seven years since it began operating, it has become one of the most respected mortgage companies in the US. It is now an active member of the NRMLA and is one of the few lenders endorsed by the American Bankers Association.

Loan Options

RMF has a great variety of reverse mortgages, including HECMs and proprietary loans unique to the company. Reverse mortgages at RMF can be fixed- or adjustable-rate, and the payout can be a lump sum, monthly installments, or a line of credit. The limit for an HECM mortgage is $726,525.

When it comes to unique reverse mortgage options, RFM offers a proprietary Equity Elite reverse mortgage that comes with a number of advantages compared to HECMs. For instance, the minimum age is lowered from 62 to 60, and there are no limits on how much you can take out during the first year of the loan.

This loan is perhaps best-suited for senior citizens with higher-value homes, as it raises the borrowing limit to $4 million. It is also a better option for condominium owners, as it not only allows FHA-approved ones, but also Fannie Mae and RFM-approved condominiums, making it easier to qualify for a reverse mortgage. Last but not least, with the Equity Elite Zero feature, you can eliminate almost all lender closing costs and save even more money.

Pricing & Discounts

This is where RFM can be a bit vague, because there are no clear indicators about reverse mortgage fees on the website. The listed fees have to do with HECMs, because these loans follow government-mandated limits. The origination fee for these goes from $2,500 to $6,000, and there is a one-time counseling fee of $125 as well.

Other than that, most of the fees for the Equity Elite reverse mortgage can be financed with the loan itself, meaning that there is no out-of-pocket cost and the fees are paid along with accrued interest when the loan becomes due.

When it comes to discounts, RFM offers a $500 gift card to borrowers who find that the company cannot match reverse mortgage costs on competitor websites. That is a great statement of confidence.

Customer Experience

For a while, RFM did not have a reverse mortgage calculator, but the company is quickly improving its website, and it now has one of the least intrusive calculators we have seen. You can get a quote on your fees for a reverse mortgage without giving too much personal information, and then choose if you want to proceed with contacting the lender.

The website itself is not too robust, but it was designed to give you almost everything you need right on the homepage. There is a lot of useful information about everything regarding reverse mortgages, and if you need a more personal touch you can always chat with a helpful live support staffer.

The live chat option requires you to give your phone number, so that part of the service can be seen as a bit intrusive. However, this is a small gripe, and RFM customer experience overall earns high marks, which is why we are not at all surprised that it has A+ rating with the BBB.

Final Words

Even as a newcomer to the market, RFM can easily be considered among the leading home mortgage lenders with the highest quality of service. Add to this a great proprietary reverse mortgage loan offer, nationwide coverage, and ever-improving customer support, and Reverse Mortgage Funding is a solid choice for any borrower.

Reasons to buy

Great proprietary loan

Live chat customer support

Nationwide coverage

Fortunly’s Guide to Reverse Mortgages

What is a reverse mortgage?

Reverse mortgages are properly known as home equity conversion mortgages. They are home loans for homeowners 62 or older. The first reverse mortgage purchase in the US was in 1961. The loan was taken out by a borrower named Nellie Young in Portland, Maine.

In 1969, the concept caught the eye of the Senate Committee on Aging, but it was not until 1983 that the Senate finally approved a proposal by Senator John Heinz to have reverse mortgages insured by the Federal Housing Administration.

These loans were designed to allow older homeowners who had acquired equity over the years to tap into it and have reverse mortgage lenders make payments to the borrower. HECM reverse mortgages are insured by the FHA. Even when the estimated value of a house drops after loan is signed, the FHA will always cover the difference in the outstanding debt.

Requirements for getting a reverse mortgage

Not every person or every property is eligible for a reverse mortgage loan, and there are certain requirements that need to be met before you can apply for an HECM mortgage. They include the following:

Personal Requirements

• The youngest borrower on the home’s title must be at least 62 years old. (Some non-FDA approved types of reverse mortgages lower the minimum age to 60.) A reverse mortgage loan will never apply to any spouse or family member who was younger than that at the time of signing.

• The borrower is required to live in the home as primary residence for the entire duration of the reverse mortgage loan. Vacation homes and rental properties are not eligible.

• The borrower has to own the home or have at least 50% equity in it. It is also possible to be eligible for a reverse mortgage if you have a low existing mortgage, in which case the funds from the HECM would first be used to pay it off before you could use them for other purposes.

• The borrower is required to meet with a Department of Housing and Urban Development mortgage counselor prior to applying for the loan.

Property Requirements

• Family Homes

Single-family homes are eligible for reverse mortgage plans, but borrowers can qualify even if the property houses multiple families. The home cannot have more than four units, and the borrower has to be living in one of the units as primary residence.

• Community Properties

Condominiums and townhouses can also receive a reverse mortgage, but in the case of condominiums the development has to be approved by HUD. Homes in planned unit developments are also eligible, but unlike townhouses, in which major repairs are the obligation of the homeowner’s association, the homeowner himself is responsible for repairs.

• Manufactured Homes

Manufactured houses are those that had pieces of the home built in a factory and later assembled on-site. They are eligible for a reverse mortgage plan if they meet FHA requirements. The manufactured home must have been built after 1976, be attached to a permanent framework, have a floor area of at least 400 square feet, and meet safety and flood standards. The home also must be classified and taxed as real estate.

Financial Requirements

The borrower has to prove financial ability to meet loan obligations, including paying property-related taxes and insurance, homeowner’s association fees, and home maintenance and repair costs.

Types of reverse mortgages

• Single purpose reverse mortgage

These mortgages are offered by certain state and local government agencies and non-profit organizations, and may only be used for a single purpose that is specified by the lender.

• Proprietary reverse mortgage

These are private loans backed by the companies that develop them, and can be used for any purpose or provide more funds if you own a home that is valued highly.

• Federally insured reverse mortgage (HECM)

This is the most common type of a reverse mortgage, and the one that is backed by HUD. These loans are available only through FHA approved lenders and can be used for any purpose.

Reverse mortgage payment plans

Once your reverse mortgage loan is approved and signed, you can choose how to receive the proceeds.

• Single Disbursement Lump Sum

Prior to changes made to the reverse mortgage program a few years ago, borrowers were able to withdraw all of the equity in a single payment, but now the maximum amount that you can obtain during the first year is 60% of the principal amount. The new rule does not apply to existing mortgages and other required payments, where the borrower can withdraw an additional 10% of the principal limit. The remaining balance is available for withdrawal in year two of the loan.

• Line of Credit

A reverse mortgage line of credit serves as a safety net that also allows your reserve funds to grow in value. With this option, you have money that is available to you but you accrue interest only on the funds that you withdraw, while the reserve grows at the same rate as the interest rate on the loan plus 1.25% monthly.

This growth is unique to line of credit reverse mortgages. A line of credit payment option is great if you want to hedge against falling house prices. Your assets will grow even if prices fall.

• Tenure Payment

This payment plan lets you receive equal monthly payments similar to an investment annuity, and can go on for as long as you maintain the home as your primary residence, regardless of how high the outstanding balance grows. The term length for a reverse annuity mortgage is calculated by subtracting the age of the youngest borrower from 100 years, but if you happen to live past 100 years you will continue to receive payments.

• Term Payment

Term payments give you a regular fixed dollar amount from the lender every month for the term of the loan. Monthly payments are calculated by the lender and will not be reduced even if the home decreases in value.

At the end of the term, the borrower is not obliged to pay any of the borrowed funds, and can remain in his home as long as he fulfills the obligations under the terms of the mortgage. These include paying property taxes, home insurance, maintenance costs, and other property charges.

• Hybrid Options

There are also two additional hybrid reverse mortgage payment options worth mentioning. The first combines tenure and line-of-credit plans. It allows the borrower to withdraw less than the maximum monthly payment. The remaining funds get placed into a line of credit, which can prove extremely useful in the event of a sudden expense.

The second hybrid option combines term payments with a line of credit, and differs from the first in that the arrangement is set for a fixed period of time. The borrower receives small monthly payments and the remainder of the funds are available in a line of credit, just like the first hybrid option.

Reverse Mortgage Fees

When you are signing a reverse mortgage loan, lenders will charge you various upfront fees as well as ongoing expenses. These costs of reverse mortgage will vary depending on the type of mortgage that you take. When you take an HECM mortgage, these are the fees that you can expect to see:

Upfront Fees

• Appraisal Fee

This fee pays for the appraisal of your home. The reverse mortgage lender hires an appraiser who determines how much your home is worth and, indirectly, how much money you can borrow. Appraisal fees are usually paid out of pocket, and vary depending on your region and type of home, but you can expect to pay a few hundred dollars.

• Closing Costs

These fees cover many of the same closing costs associated with traditional first mortgages. Reverse mortgage closing costs are often rolled into the loan amount. Here is a list of closing costs and estimates on how much you should expect to pay:

Credit report fee: $20-50
Survey: $100-$250
Document preparation fee: $75-150
Title insurance: Varies by loan amount and region. The more expensive the property, the more you pay for title insurance.
Flood certification fee: $20-30
Escrow fee: $150-800
Recording fee: $50-500
Courier fee: $50
Pest inspection: $100

• Initial Mortgage Insurance Premium

This fee is charged by the government to cover its guarantee of HECM reverse mortgages. The initial fee for the reverse mortgage insurance premium is 2% of the maximum claim amount, which is usually the appraised value of your home.

• Loan Origination Fees

The origination fee is charged by the lender in order to process your loan. The amount you pay will depend on the value of your home, but since HECM mortgages are strictly regulated by HUD and are FDA insured, there are strict caps on how much the lender can charge.

For the first $200,000 of property value the lender can charge 2% or up to $2,500, but if the house is appraised for more than $200,000, the lender can charge an additional 1% of the amount over that threshold. For example, if your home is appraised at $400,000, the lender can charge up to $6,000 for an origination fee ($200,000 x 2% + $200,000 x 1%). The maximum for an origination loan fee on a HECM reverse mortgage is $6,000, but this can be exceeded if you’re getting a proprietary reverse mortgage.

• Points

This is an optional upfront fee that you can pay in order to get a discount on your loan’s interest rate. In exchange for paying points, the lender charges a lower interest rate on your reverse mortgage. You save money in the long run.

Ongoing Fees

• Interest

Because reverse mortgages are loans, you will pay interest. What’s special about reverse mortgages is that this interest is not something that is paid while you are living in your home, but only after you move out or pass away.

Reverse mortgage rates can be fixed or adjustable. A fixed rate stays the same over the entire duration of the reverse mortgage, while an adjustable rate changes over time based on a market index. If you get an adjustable-rate loan, your reverse mortgage documentation will specify how often the rate can change. If you choose a line of credit reverse mortgage, you will owe interest only when you borrow money through the line of credit, and won’t be charged on the unused portion of the money.

• Mortgage Insurance

This fee is paid to the FHA for guaranteeing your loan, and the payment is 0.5% of your outstanding mortgage balance. Reverse mortgage insurance is added to your outstanding loan balance, but it isn’t generally paid while you are still living in your home.

• Servicing Fee

Monthly servicing fees can be charged for managing your loan. The maximum is $30 for fixed or adjustable loans that reset annually and $35 for adjustable loans that reset on a monthly basis.

Benefits of Reverse Mortgage Loans

Senior citizens can use reverse mortgages to cover retirement expenses. Reverse mortgage loans benefit the borrower in four unique ways:

• Maintain Ownership of Your Home

Reverse mortgage programs never transfer the title or the right to sell your house to the lender as long as you keep paying property taxes and homeowners insurance and you maintain the property according to FHA requirements. The house will remain yours until you move out or pass away, and if you move out you will still have the option to pay off the loan and keep your property.

• No Monthly Payments

Unlike a home equity loan that has borrowers paying monthly mortgage payments, a reverse mortgage frees you of this requirement. It gets repaid only after you sell the house, move out of it, or pass away. Before then, there is no need to pay off the loan balance or interest. Reverse mortgages are also considered loans, not income, so your Social Security payments and Medicare benefits remain unaffected.

• Several Payment Options

Reverse mortgage payment options include flexible disbursement options that can be tailored to your needs. You can receive funds in a full or partial sum, in monthly payments, a line of credit, or according to other options. It is even possible to change disbursement options during the term of the loan.

• Federally Insured

The Home Equity Conversion Mortgage is the most common of all reverse mortgage loans, and is managed by HUD. Because the loan is federally insured, you are protected against things like lender defaults or housing market declines. If housing prices go down and the loan balance is more than the house is worth, neither you nor your heirs will have to cover the difference. It will be paid by government insurance.

Avoiding Reverse Mortgage Scams

Reverse mortgages are not only a great opportunity for borrowers, but due to the nature of the loan and the population that is getting them, they are also a magnet for fraudsters and scammers. In recent years, stronger government regulations have helped reduce the number of reverse mortgage cons. But bad guys still target senior citizens.

One of the most common ways that borrowers are scammed out of their money is when they use a reverse mortgage plan to pay for home improvements. Some vendors and home-improvement contractors have not actually delivered on the promised quality or quantity of work – or even worse, stolen the homeowner’s money outright.

Sellers may push you to invest the money from your reverse mortgage and buy other financial products from their company. They may try to rush you through the process before you get to read everything or check with a counselor. Our advice is to resist all of these proposals and shady practices.

The last common fraud issue is probably the hardest to face: being taken advantage of by relatives and caregivers. There are cases of family members using attorneys to take out a reverse mortgage on the home and then stealing the money, or convincing the homeowner to buy annuity or whole life insurance that he or she can afford only through a reverse mortgage purchase.

Frequently Asked Questions

1. Can you lose your home with a reverse mortgage?

Yes. Reverse mortgage pitfalls are real, and these loans are not a care-free solution to your financial issues as you transition into retirement. These loans are as binding as any other, and while your home is generally much safer when you purchase a reverse mortgage, you are still required to fulfill certain obligations. Simply living in your home is one of them.

And while living in your own house certainly seems like a given, many people do not understand the consequences. If you move out or decide to sell your home while a reverse mortgage loan is active, you will trigger a loan default that may result in a foreclosure.

And that’s not all.

You also risk losing your home if you do not live in it as your primary residence, or even if you are away from the house for more than 12 consecutive months. In fact, you are required to live in the home for more than 6 months each year, excluding some medical reasons that can keep you away from it. And you are required to maintain it according to FHA reverse mortgage requirements.

Other issues that may result in losing your home have to do with not paying taxes and homeowner’s insurance, or if you pass away without listing your spouse or partner on the loan as a co-borrower or non-borrowing spouse.

2. Are heirs responsible for reverse mortgage debt?

No, the heirs of a deceased borrower – including a spouse who is not a co-borrower – are not responsible for paying back the loan. Reverse mortgages are non-recourse loans, meaning that even if their balance is more than the appraised value of the home, the extra cost gets absorbed by the Federal Housing Administration.

Still, reverse mortgage rules and regulations put a lot of responsibility on heirs after the death of the last borrower. That is when the reverse mortgage loan comes due and heirs have to decide what to do next. They will usually get 30 days’ notice from the lender to buy the home, sell the home, or turn it over to the lender to satisfy the debt.

It is possible to extend this up to a year so the heirs can have more time to sell the home or provide finances for purchasing it, but the most common extensions are up to 90 days.

3. What happens if you outlive reverse mortgage?

One of the most important reverse mortgage facts is that you absolutely cannot outlive your loan. There is a lot of misinformation that makes seniors worried about being kicked out of their homes due to outliving these loans, but they are not based in reality.

The only way you can default on your loan is if you fail to pay your property taxes or insurance, or if you neglect maintaining your house. Other than that, no reverse mortgage will ever lead to you or your spouse having to stop living in your home.

4. What is the downside of getting a reverse mortgage?

There are a couple of clear dangers of getting an HECM loan, most obvious being the fact that reverse mortgage interest rates and fees eat up your equity. This in turn leaves fewer assets to your heirs, who will also have to repay the loan balance if they want to keep the home for themselves.

The other big downside of reverse mortgages is that your health directly affects the loan, meaning that you have to remain able to maintain your home and keep living inside it. Reverse mortgage qualifications dictate that If your health deteriorates so much that you have to be relocated to a medical facility for an extended period, the loan becomes due and you may lose your house. There is also the issue of losing eligibility for needs-based government programs like Medicaid that can be affected by taking out a reverse mortgage.

The third serious downside concerns borrowers who have friends, relatives, or roommates who are not on the loan paperwork but live with them in the home. These people can be left stranded and forced to vacate, even if you list them as boarders on the paperwork, because no one under the age of 62 can be considered a borrower. This issue extends even to spouses.

5. Can you walk away from a reverse mortgage?

Yes, you can. The majority of reverse mortgage loans come with a three-day period during which you can exercise “the right of rescission” and change your mind about taking out a loan, even if it’s signed. You can cancel the loan during that period without penalty fees. All you have to do to cancel a reverse mortgage plan is to alert the lender in writing within three days from signing. The lender is then required by law to cancel all loan documents and return all fees, closing costs, and unused funds paid by the consumer within 20 days.