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

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

The following lenders are our top ten picks for the best reverse mortgage lenders of 2019. Each of them has originated more loans this year than the vast majority of other lenders and each has maintained a positive reputation in reverse mortgage lending.

Reverse Mortgage LendersLender offers FHA-Insured HECM reverse mortgagesLender offers private reverse mortgages for high value homes
One Reverse MortgageYesYes
American Advisors Group (AAG)YesYes
Liberty Home Equity SolutionsYesNo
Finance of America ReverseYesYes
Reverse Mortgage FundingYesYes
Retirement Funding SolutionsYesNo
Fairway Independent MortgageYesNo
Longbridge FinancialYesYes
Reverse Mortgages.comYesNo
Quontic Bank FSBYesNo

One Reverse Mortgage

One Reverse Mortgage is a division of Quicken Loans and may well be the most trusted originator of traditional HECM reverse mortgages in the country. Quicken Loans has been a mortgage lender since 1985, in that time closing over a million traditional mortgages, and now One Reverse Mortgage leverages that experience in the reverse market. One Reverse is also a member in good standing with the NRMLA, which certifies lenders who maintain respectable standards in their dealings with clients. 

Aside from this company’s reputation as a top choice of lender since 2001, what makes One Reverse Mortgage notable is its customer care and consumer resources. One Reverse Mortgage demonstrates a high degree of transparency by encouraging prospective borrowers to include family in group calls and meetings, making borrowing decisions more inclusive. It also offers a broad range of online resources to help reverse mortgage shoppers understand whether a reverse is the right choice for them, and provides a reverse mortgage calculator that renders no-obligation estimates of potential payouts. Visitors to the website are also offered a step-by-step rundown of One Reverse Mortgage’s application process, explaining how everything goes from pre-application to closing.

Though One Reverse Mortgage is licensed in all 50 states, it currently operates in 47 states, excluding residents of West Virginia, Vermont, and Rhode Island for the time being. Customer service agents are available by phone and in person at four main branches and more than 150 brokerage locations nationwide. 

Products Offered by One Reverse Mortgage


Reverse Mortgage Terms and FeaturesHELO: Home Equity Loan Optimizer (Private Offering)Adjustable Rate HECMFixed Rate HECMHECM for Purchase
Best UsesUse equity in a condominium, high-value home, or home with HERO-financed solar panelsMore adaptable loan option for long-term retirement planningLower-interest loan option for immediate cash needsBuy a new home with no mortgage payments
Maximum Payout$4,000,000$726,525 $726,525 Based on the final sale price of your home
Federally InsuredNo — private insurance availableYesYesYes
Non-RecourseYesYesYesYes
Lump Sum PayoutsYesYesYesYes
Line of Credit PayoutsNoYesNoN/A
Monthly DisbursementsNoYesNoN/A
Combination PayoutsNoYesNoN/A

HELO: The Home Equity Loan Optimizer

HELO is One Reverse Mortgage’s privately offered reverse mortgage, which means that it is not subject to heavy regulation by the FHA like a traditional HECM reverse. For people who own properties that disqualify them from receiving government-backed HECMs, such as a high-value condo or home with HERO-financed solar panels, products like HELO can add a significant tactical advantage to a retirement plan by allowing you to tap into more of your high-value home’s equity. While privately offered reverse mortgages like HELO are not insured by the federal government, they can benefit people who may not qualify for a traditional, government regulated HECM and are privately insurable.

The HELO private reverse mortgage offers:

  • Up to a $4M payout
  • Interest rates from 5.5 percent to about 7.25 percent depending on your circumstances
  • Lump sum payouts when your application is approved
  • Fixed interest rates at signing (rates will not increase)
  • No mortgage insurance premiums (MIPs) required
  • Non-recourse loan — you do not consign your home’s title

Requirements to Qualify:

  • Must be 62 years of age or older
  • Must have all or most of your mortgage paid down
  • Must have a credit score of at least 640 (fair credit)
  • Must meet with a licensed counselor to apply
  • Must undergo a financial assessment 
  • Property must be your primary residence
  • Applicants must be able to pay their housing expenses (no set-aside offered)

One Reverse Mortgage advises that people interested in a private product like HELO should undergo a counseling session with one of their licensed specialists and also talk things over with an independent financial planner to ensure they make the best decision for their personal circumstances. For applicants who feel more comfortable having insurance coverage for their reverse mortgage, private insurance is available for proprietary reverse mortgages like HELO.

FHA-Insured Reverse Mortgages from One Reverse Mortgage 

One Reverse Mortgage is a federally approved lender of traditional HECM reverse mortgages. These are insured by the federal government and are regulated to be safe and low-cost options for seniors. While heavy regulation does render all traditional HECM products nearly the same in terms of costs, fees, and interest rates, One Reverse Mortgage is possibly the most well-regarded and user-friendly reverse lender in the country, and we’d recommend them especially to seniors who may require a lot of credit repair work or family counseling before they can close. Still, we encourage comparison shopping for reverse mortgages, even if only to get a feel for the level of customer service that each lender is likely to provide and to better understand the options at your disposal, and it never hurts to find out which lenders can shave a percentage point or two off of your interest margin.

One Reverse Mortgage’s FHA-insured home equity loans include:

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

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

Why We Recommend One Reverse Mortgage

One Reverse Mortgage has extensive experience in banking that stretches all the way back to 1985. With over a million traditional mortgages closed to date and a solid position as one of the top two largest originators of reverse mortgages this year, this subsidiary of Quicken Loans has a proven track record of knowledgeable customer service. One Reverse has also maintained a certification with the National Reverse Mortgage Lenders Association, which only represents member institutions that uphold a stringent code of ethics in lending.

What impresses us most about One Reverse Mortgage is their dedication to transparency and customer care. This lender encourages potential borrowers to include family and friends in meetings with licensed loan counselors to help clients and their loved ones gain a more comprehensive understanding of what to expect from a reverse mortgage. One Reverse also offers a suite of informational tools and articles to help their clients understand all of their options.

What Customers Are Saying

This lender has an A+ rating with the Better Business Bureau as well as plenty of glowing reviews from consumers who have chosen One Reverse Mortgage as their reverse lender for both private and FHA insured loans. Multiple reviewers on the Better Business Bureau’s website have cited that One Reverse connected them with qualified and supportive agents who kept them informed at each step of the reverse mortgage closing process. One such reviewer, Adelaide Y., states that One Reverse provided “…very qualified agents who were not only courteous, but competent. They were knowledgeable about material matters associated with their job. I was regularly informed at each step of my loan”. 

Other reviewers have taken to sites like Trustpilot to applaud the multiple repayment options that were available to them at the end of their loan’s term. Paula in Long Beach shares that she was well-informed of all repayment options, including refinancing for heirs who wish to keep the reverse mortgaged home in the family:  “…a child [heir] refinancing into a conventional mortgage is also offered as a repayment option.”

Client Testimonials 

“We had a lot of questions when we first started looking into this. They were very professional and were able to answer all of our questions without hesitation.” 

“Their fees are very good and very competitive with the rest of the market. We did a lot of shopping around and had the best luck with them. I can highly recommend them based solely on their fee costs.” 

“There are a lot of different options for repayment. Their portfolio is excellent and very diverse and they are willing to bend to whatever it is that you are looking for.” 

“They gave me a very good value for our home. I was skeptical at first, but after their people came in and gave us our price, I was very happy with the outcome.”

American Advisors Group (AAG)

AAG is 2019’s largest provider of reverse mortgages and has been the top lender by volume throughout every month this year. AAG has also earned certification from the National Reverse Mortgage Lender’s Association for its high ethical standards. Boasting a 97 percent customer satisfaction rating from its surveyed clients, this long-standing lender has gained a reputation for stability and comprehensive customer service in both the reverse and forward mortgage markets. 

The AAG website receives high marks for its ease of use, providing easy access to a free info kit that includes a DVD and detailed mailer, a basic reverse mortgage qualification questionnaire and plenty of direct contact information. Consumers who are new to the idea of a reverse mortgage will appreciate AAG’s Learn section that offers high-quality articles with information straight from the NRMLA and other reputable sources, including a handy Reverse Mortgage Loan Glossary full of hard-to-remember terms, and also a detailed breakdown of what borrowers can expect to pay in closing costs.

AAG currently offers HECM reverse mortgages across the country, though its private reverse product, the AAG Advantage Jumbo Loan, may currently be available in a limited number of states. To find out if you qualify or for more information on AAG’s traditional HECM offerings, call (866) 948-0003 or visit them online at AAG.com.

Products Offered by AAG

Reverse Mortgage Terms and FeaturesAAG Advantage Jumbo Loan (Private Offering)Adjustable Rate HECMFixed Rate HECMHECM for Purchase
Best UsesAccess equity in a high-value homeMore adaptable loan option for long-term retirement planningLower-interest loan option for immediate cash needsBuy a new home with no mortgage payments
Maximum Payout$4,000,000$726,525 $726,525 Based on the final sale price of your home
Federally InsuredNo — private insurance availableYesYesYes
Non-RecourseYesYesYes
Lump Sum PayoutsYesYesYesN/A
Line of Credit PayoutsNoYesNoN/A
Monthly DisbursementsNoYesNoN/A
Combination PayoutsNoYesNoN/A

The AAG Advantage Jumbo Reverse Mortgage

The AAG Advantage Jumbo Reverse Mortgage is AAG’s privately offered reverse mortgage intended exclusively for owners of high-value homes. If you have built up a lot of equity in your primary residence, maximizing your retirement portfolio may be difficult with the payout limits of government-insured reverse mortgages, which only allow borrowers to access up to $726,525 of their home’s equity. The AAG Advantage Loan can be of exceptional benefit to people who purchased their home when prices were low, or whose home value has risen over years of ownership. 

The HELO private reverse mortgage offers:

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

Requirements to Qualify:

  • Must be 62 years of age or older
  • Must have all or most of your mortgage paid down
  • Property must be high value 
  • Must meet with an AAG counselor to apply
  • Must undergo a financial and credit score assessment
  • Property must be your primary residence
  • Applicants must be able to pay their housing expenses (no set-aside offered)

AAG performs initial counseling sessions with prospective applicants to ensure they are aware of all options and obligations involved with the Advantage reverse mortgage loan. However, it is also advised that interested parties speak with a personal financial advisor before moving forward with a reverse mortgage of any kind, and that they consider procuring private insurance for their jumbo reverse mortgage as FHA insurance is unavailable for these products. To reach a counselor at American Advisors Group, visit them online at AAG.com or call (866) 948-0003.

FHA-Insured Reverse Mortgages from American Advisors Group 

AAG is also a lender of traditional HECM reverse mortgages and is approved and licensed by the Department of Housing and Urban Development and the FHA to provide this service to seniors. Though traditional HECM products are regulated to have the same basic costs and structures no matter what lender you use, AAG has become the top traditional reverse mortgage lender in the country, maintaining that position since 2013, and is definitely one of our top picks to include in your comparison shopping.

AAG’s FHA-insured reverse mortgage loans include:

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

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

Why We Recommend AAG

AAG has been the largest reverse mortgage lender in the country throughout each month of 2019 and has maintained a reputation for stability over many years in the financial sector. As a reverse lender, AAG is a member in good standing with the National Reverse Mortgage Lender’s Association, which is a testament to this lender’s ethical treatment of clients and their supportive customer service environment.

What we like most about AAG is the abundance of plain-spoken and high-quality articles available to consumers on their website. AAG consistently offers all the facts to reverse mortgage shoppers who wish to weigh the risks and benefits of HECMs, and all information on the AAG site comes directly from highly reputable sources in lending. Another point in this lender’s favor is their client satisfaction rating of 97 percent — a figure earned from clients that AAG surveyed last year.

What Customers Are Saying

This lender has an A- rating with the Better Business Bureau and has received a 4.5-star rating from over 300 consumer reviews there too. Common themes in AAG’s reviews cite a high degree of professionalism as well as dedicated loan specialists who are there for clients at every step of the loan closing process. Ronald O. states that “during [the] whole initial process, things were handled professionally and efficiently.”

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

Client Testimonials 

“Associates at AAG are very professional to deal with and exemplary in their work on behalf of their customers!” 

“Excellent experience — from start to finish the staff was professional, knowledgeable and extremely helpful. All was done in a timely manner without a hiccup. Can and did recommend their service.” 

“The amount of paperwork seems endless, but my rep was with me all the way.” 

“I’m particularly happy with the way AAG handled the processing of my loan application. The person working with me answered all my questions (and I had many) promptly and professionally. I was glad to have only one person managing it throughout most of the process.”

Liberty Home Equity Solutions

Liberty Home Equity Solutions began as a small startup in 2013 but now services more reverse mortgages than the vast majority of other lenders. The company’s president is currently an officer on the board of the NRMLA — a national organization which certifies lenders who maintain high ethical standards and a high degree of transparency. These are outstanding credentials and they make Liberty Home Equity Solutions a strong choice of lender, as does Liberty’s Iron Clad Guarantee. For middle-class families, this lender represents an accessible, dependable and high-transparency option among reverse mortgage lenders.

Liberty’s Iron Clad Guarantee actually consists of multiple guarantees in one, mostly regarding overall costs, customer service, and the loan application and approval process. Liberty offers reverse mortgage borrowers perks like $100 gift cards and $500 account credits if it cannot match a competitor’s costs or takes longer than 60 days to close a loan. The guarantee also ensures that customers can complete the entire sign-up process from home if they wish and that they will have a dedicated group of specialists handling their account whom they will always be able to reach by phone during normal business hours (PST). 

Liberty Home Equity Solutions provides a range of informative articles about what to expect from its HECM application process and required HUD counseling sessions, along with multiple entries on how a reverse mortgage works. It even offers advice on how to choose the right lender for you, which is a big help to comparison shoppers who are still weighing their options. Liberty Home Equity Solutions is currently funding reverse mortgages in every state except Utah.

To reach a licensed Liberty Home Equity Solutions counselor, call them at (866) 751-2606, or request that they get in touch with you by visiting LibertyReverseMortgage.com.

Products Offered by Liberty Home Equity Solutions

Reverse Mortgage Terms and FeaturesAdjustable Rate HECMFixed Rate HECMHECM for Purchase
Best UsesMore adaptable loan option for long-term retirement planningLower-interest loan option for immediate cash needsBuy a new home with no mortgage payments
Maximum Payout$726,525 $726,525 Based on the final sale price of your home
Federally InsuredYesYesYes
Non-RecourseYesYesYes
Lump Sum PayoutsYesYesN/A
Line of Credit PayoutsYesNoN/A
Monthly DisbursementsYesNoN/A
Combination PayoutsYesNoN/A

FHA-Insured Reverse Mortgages from Liberty Home Equity Solutions 

Liberty Home Equity is exclusively a lender of traditional HECM reverse mortgages, including HECMs for new home purchases as well as fixed and adjustable rate HECMs. Unlike most lenders mentioned here, Liberty Home Equity Solutions does not currently offer a private, or “jumbo” reverse mortgage option and is only a lender of FHA-insured HECM products, which they are licensed by the federal government to both originate and service throughout the life of a loan. 

Liberty Home Equity Solutions’ reverse mortgage options include:

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

Traditional HECMs are heavily regulated by the federal government, so their costs and terms are standardized among all lenders to keep them safe and affordable for seniors. As costs and fees vary little and are relatively quite low, the differences between lenders of HECMs are primarily in their customer service infrastructures, their special offers, and their guarantees. However, note that you may also see some small variance between the interest rates you are offered as you comparison shop for a traditional reverse mortgage. 

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

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

Why We Recommend Liberty Home Equity Solutions

Liberty Home Equity has grown quickly since its inception in 2013, now servicing more reverse mortgages than a very long list of other lenders and brokers. What we love about Liberty is that its president is currently an officer on the board of the NRMLA, which certifies member institutions across the country that uphold high ethical standards of customer service. We were also impressed with Liberty’s Iron Clad Guarantee, which offers price matching, high customer service standards, and a speedy application and closing process.

What Customers Are Saying

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

Liberty Home Equity has received more than 4.5 stars on ConsumerAffairs.com from over 1,150 reviews. We noticed that multiple consumers positively rated Liberty based on customer support. Pamela of Land O’ Lakes, FL states that, “The representative … was wonderful. He got back with me with any questions and then he would check if everything was going okay. He was right on top of everything and I was very comfortable working with him.”

Client Testimonials 

“Overall, Liberty is a good company and I’m glad I chose them. They are very professional, they helped us out and we have money to fall back on now in case we need it.” 

“We spoke with three companies, and our loan officer at Liberty, Chris, was very positive about it. He kept in touch us with us all of the time and he nursed us along the whole thing. He was thorough and responsive. Anything that we asked, he was able to answer and we felt really comfortable with him.” 

“The application process was long but everything seemed to work okay. I really liked that they stayed with me all the time and kept me informed of everything that was going on.” 

“Liberty made me a better deal compared to other companies. I decided to sign up and we had somebody came out to the house and have it signed everything. It went pretty smooth. The underwriting part took about two days at the most, and the loan officer I dealt with was available. If I had to call in, she answered the phone. She always addressed my concerns right away.”

Finance of America Reverse

Finance of America Reverse is a member of the National Reverse Mortgage Lenders Association and 2019’s fourth-largest lender of traditional HECM reverse mortgages. Furthermore, they may be our best option in the private reverse mortgage arena as well. FAR has maintained a reputation as a top lender since at least 2011, providing not just private reverse mortgages and HECMs but also a host of other financial instruments, from student loans to large commercial loans. 

This lender has leveraged its experience in the financial sector to gain a keen understanding of what its clientele needs, and the FAReverse.com website overwhelmingly demonstrates that. Loaded with easy-to-understand information for reverse mortgage shoppers, FAR’s comprehensive website shows that this lender takes pride in its ability to offer tools and information to people in any state of retirement readiness. It even features a personality quiz that helps you understand your retirement personality type so you can more easily shop for your best options. Also of particular interest is the FAR reverse mortgage calculator, which can estimate the likely payout of your loan. 

FAR’s stated mission is to help you develop your retirement goals, and with the wealth of information they supply online and their industry-first Borrower Care concierge program for private reverse clients, Finance of America Reverse is clearly up to the task of coaching retirees to get the most out of their time ahead while providing plenty of hand-holding in the process.

To contact Finance of America and discuss your options, call (855) 421-4745 or email them at Contact@FAReverse.com.

Products Offered by Finance of America Reverse

Reverse Mortgage Terms and FeaturesHomeSafeAdjustable Rate HECMFixed Rate HECMHECM for Purchase
Best UsesAccess equity in a high-value home with flexible payout optionsMore adaptable loan option for long-term retirement planningLower-interest loan option for immediate cash needsBuy a new home with no mortgage payments
Maximum Payout$4,000,000$726,525 $726,525 Based on the final sale price of your home
Federally InsuredNo — private insurance availableYesYesYes
Non-RecourseYesYesYesYes
Lump Sum PayoutsYes — HomeSafe Standard available in 22 statesYesYesN/A
Line of Credit PayoutsYes — HomeSafe Select available in CaliforniaYesNoN/A
Monthly DisbursementsYes — HomeSafe Flex available in California, Connecticut, Florida, Texas, and South CarolinaYesNoN/A
Combination PayoutsYes — HomeSafe Flex available in California, Connecticut, Florida, Texas, and South CarolinaYesNoN/A

The HomeSafe Private Reverse Mortgage

While Finance of America offers traditional HECMs in all 50 states, a traditional HECM limits the amount a homeowner can borrow to $726,525. For those who have higher-value homes and more equity to take advantage of, HomeSafe offers up to $4M of a home’s equity. HomeSafe is FAR’s privately offered (not FHA-insured) reverse mortgage, and though it is only offered in 22 states, it easily wins our pick for the most versatile private reverse mortgage from a top lender in 2019. 

While most of the other private options we have explored here only offer lump-sum payments to the borrower at closing, HomeSafe gives residents of certain states a payout advantage. For residents of California, Connecticut, Florida, Texas, and South Carolina, HomeSafe Flex can offer a combination of lump sum and monthly payments. For residents of California, HomeSafe Select offers a line of credit so you can draw from your equity only when you need it, allowing what’s left in the bank to gain interest over time. Even better, with a line-of-credit payout, you won’t begin owing interest on available equity until you actually use it.

HomeSafe is primarily intended for owners of high-value homes. What this means is that the interest gains on a high-value line of credit via HomeSafe Select can be incredibly advantageous in the retirement years of California residents. However, HomeSafe Standard is by far more readily available (in 22 states), offering a highly beneficial option for people whose homes have gained value over the years or who purchased their home when prices were low.

The HomeSafe private reverse mortgage offers:

  • Industry’s first Borrower Care concierge program
  • Access to up to $4M of equity
  • Approval of condos valued at $500,000 or more
  • Options for line-of-credit payouts
  • Options for combination lump sum and monthly payouts
  • Competitive interest rates
  • Little to no out-of-pocket cost (not applicable to Purchase reverses)

Requirements to qualify:

  • Must be 62 years of age or older
  • Must have all or most of your mortgage paid down
  • Property must be high value 
  • Must meet with a licensed counselor to apply
  • Must undergo a financial assessment and credit check
  • Property must be your primary residence
  • Applicants must be able to pay their housing expenses (no set-aside offered)

States where HomeSafe Standard is available:

  • Arizona
  • California
  • Colorado
  • Connecticut
  • D.C.
  • Florida
  • Georgia
  • Hawaii
  • Idaho
  • Illinois
  • Louisiana
  • Nevada
  • New Jersey
  • Ohio
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Texas
  • Utah
  • Virginia
  • Washington

If you’re interested in a private reverse mortgage, be advised that private insurance is available from third-party companies to support a higher level of security with these loans. Finance of America Reverse provides counseling sessions for applicants, but before applying for a private reverse, consumers should always consult an independent financial advisor. 

To contact Finance of America and discuss your options, call (855) 421-4745 or email them at Contact@FAReverse.com.

FHA-Insured Reverse Mortgages from Finance of America Reverse

FAR also offers traditional Home Equity Conversion Mortgages (HECMs) that are insured, structured and closely regulated by the federal government, and unlike their private reverse mortgages detailed above, Finance of America’s HECMs are available in all North American states. HECMs are so closely regulated that they will not differ extensively from lender to lender in terms of the total cost to the borrower. For this reason, we have reserved explanation of the details of Finance of America Reverse’s HECM offerings and those of our other top ten reverse lenders for our resource section. Find that by scrolling down past our list of the top lenders of 2019. 

Finance of America Reverse HECM options include:

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

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

Why We Recommend Finance of America Reverse

FAR has been a perennial top choice of lender among reverse mortgage consumers, and what impresses us most about the group is its fast application and closing process and ability to accommodate homeowners with home values both high and low. Another point in its favor was that FAR’s website demonstrates that the agents understand their clientele and can provide the kind of long-term support that wins lenders a certification with the NRMLA. 

What Customers Are Saying

This lender has an A+ rating with the Better Business Bureau and has thousands of positive consumer reviews across the web citing their dedication to customer service as a key reason to borrow with FAR. Finance of America Reverse currently has almost 2,000 consumer reviews on ConsumerAffairs.com, many citing FAR’s price match guarantee and competitive interest rates, as well as great customer service. Michael of Redmond, WA shared that, “The application and underwriting process at Finance of America took 30 days. I had a very professional loan officer who I worked with most of the time. He was friendly and answered all the questions that I had. They were easy to work with, professional and were very responsive to all of my questions.”

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

Client Testimonials 

“I have compared about eight other companies and I liked the way I was treated by Finance of America Reverse. They were very professional and straight up. The whole underwriting and application process took about five weeks from start to finish.” 

“There were some hoops to jump through, scheduling your interviews and then scheduling the appraisal, getting the paperwork together, getting things notarized but they were very specific. Finance of America Reverse sent a checklist out with everything itemized and it was very thorough.” 

“I called several companies and liked what Finance of America Reverse had to offer. Plus, I liked working with them. The process of obtaining the mortgage wasn’t difficult at all.” 

“Finance of America was good to deal with. They were fast and did what they said they were gonna do. The process took about three weeks and it was easy to go through. My loan officer was super nice and answered my questions.”

Reverse Mortgage Funding

Reverse Mortgage Funding LLC is one of the highest-volume lenders of traditional HECMs in 2019 and is rated by clients on LendingTree.com as a notably consumer-friendly option. The only thing that kept Reverse Mortgage Funding from receiving a five-star rating with Lending Tree was a four-star assessment of its fees and closing costs, which is still a high rating among other reverse lenders. RMF is also a member of the National Reverse Mortgage Lenders Association, which means that Reverse Mortgage Funding has earned and maintained a nationally recognized certification for upholding high ethical standards in its business practices. 

What makes this lender stand out for us is its Customer for Life program, which offers a price match guarantee and the assurance that it will never sell any reverse mortgage borrower’s debt on the securities market. Selling mortgages to other financial entities is a common practice in mortgage lending, and it can introduce confusion and spotty customer service into a loan contract. 

RMF stands by a promise to service every loan they originate until the end of the contract’s term, which makes reverse mortgage borrowing with RMF a dependable and stable prospect. Another confidence-boosting aspect of the Customer for Life guarantee is RMF’s offer of a $500 gift card, which they gift to clients if they cannot match a competitor’s reverse mortgage offer.

This lender’s website is highly comprehensive as well, offering tools like a reverse mortgage calculator that gives the user an immediate estimate rather than forcing them to check their email to find the estimate. Features like this and RMF’s long list of helpful articles, such as this exceptional Reverse Mortgage Pros and Cons piece, make RMF easier to comparison shop with as well as a more transparent option than many other reverse lenders. 

A reverse mortgage with RMF is currently available to residents of all states except for Hawaii and New York, but they may expand to those states in the future. To talk about your options with a licensed specialist at Reverse Mortgage Funding, call (888) 277-1567 or contact them online at ReverseFunding.com.

Products Offered by Reverse Mortgage Funding

Reverse Mortgage Terms and FeaturesEquity Elite Reverse Mortgage (Private Option)Adjustable Rate HECMFixed Rate HECMHECM for Purchase
Best UsesAccess equity in a home or condo at only 60 years oldMore adaptable loan option for long-term retirement planningLower-interest loan option for immediate cash needsBuy a new home with no mortgage payments
Maximum Payout$4,000,000$726,525 $726,525 Based on the final sale price of your home
Federally InsuredNo — private insurance availableYesYesYes
Non-RecourseYesYesYesYes
Lump Sum PayoutsYesYesYesN/A
Line of Credit PayoutsYes — in a limited number of statesYesNoN/A
Monthly DisbursementsYes — in a limited number of statesYesNoN/A
Combination PayoutsYes — in a limited number of statesYesNoN/A

The Equity Elite Private Reverse Mortgage

Reverse Mortgage Funding’s privately backed reverse mortgage is the only private jumbo reverse from a top lender that doesn’t require applicants to be at least 62 years old. High-value homeowners who are 60 or 61 can apply in RMF’s participating states, excluding North Carolina, Utah, and Texas. This product is currently available in a quickly growing total of 22 states, and RMF is busy rolling out new payment options in select regions for borrowers who prefer gradual term payouts rather than first-year lump sums. 

The Equity Elite reverse is a fixed-rate product and comes with one of the lowest average interest rates on the market at 5.8 percent. All closing costs are covered by the lender as well, so the fees for this reverse mortgage only consist of the cost to service the loan over its lifespan and an up-front fee of $125 to pay for counseling with a Reverse Mortgage Funding licensed loan counselor.

The Equity Elite private reverse mortgage offers:

  • Available for seniors 60 and up in 19 states
  • Low fixed rates from 5.8 percent
  • No closing costs
  • Access to up to $4M of equity
  • Options for combination and monthly payouts in some states

Requirements to qualify:

  • Must be 60 years of age or older
  • Must be at least 62 in North Carolina, Utah or Texas
  • Must have all or most of your mortgage paid down
  • Property must be high value 
  • Must meet with a licensed counselor to apply
  • Must undergo a financial assessment and credit check
  • Property must be your primary residence

States where the Equity Elite Reverse Mortgage is available:

  • Rhode Island
  • Connecticut
  • New Jersey
  • Pennsylvania
  • Ohio 
  • Michigan
  • Illinois
  • Virginia
  • North Carolina
  • South Carolina
  • Georgia
  • Florida
  • Texas
  • New Mexico 
  • Colorado
  • Utah
  • Arizona
  • Nevada
  • California
  • Oregon
  • Washington State
  • Montana
  • D.C

FHA-Insured Reverse Mortgages from Reverse Mortgage Funding

RMF is a federally licensed lender of traditional HECM reverse mortgages, and as these products are very heavily regulated, their HECM offerings will mirror those of other lenders. However, shoppers of HECMs should still apply with multiple lenders like RMF to find their best interest rate and to get a feel for the customer service each lender provides. 

Reverse Mortgage Lending stands by its Customer for Life guarantee, which ensures that, unlike many other lenders, it will never pass the job of servicing your loan onto another lender after signing a contract. Although interest rates tend to vary negligibly for FHA-regulated reverse mortgages, RMF’s private reverse product has one of the lowest average fixed rates in the industry, potentially indicating that this lender may offer competitive rates for their traditional HECMs as well. 

Reverse Mortgage Funding HECM options include:

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

To talk about your options with a licensed specialist at Reverse Mortgage Funding, call (888) 277-1567 or contact them online at ReverseFunding.com.

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

Why We Recommend Reverse Mortgage Funding

RMF is one of our top picks for 2019 not only because it is an NRMLA member — it is also one of the relatively few top lenders who guarantee consumers that it will never pass servicing of a reverse mortgage loan to another lender. Borrowers who begin a reverse mortgage loan with RMF stay with RMF, and it’s all part of its Customer for Life program. 

Another aspect of the Customer for Life program that stands out for us is RMF’s price match guarantee. It aspires to match the estimates quoted to applicants by other lenders, and agents also provide detailed estimates of their quotes in writing so that, should another lender offer a better option, consumers can easily take part in those other lenders’ price matching programs with an RMF estimate in hand.

What Customers Are Saying

This lender has an A+ rating with the Better Business Bureau and has been reviewed as having a particularly consumer-friendly service ethic. Jolyn O., writing on the Better Business Bureau website, stated that RMF exceeded her customer service expectations: “I am so grateful that I chose to work with Reverse Mortgage Funding and in particular, Jason M*********y, who far exceeded any expectations I had for a loan specialist. Jason and his team were informative, kind, patient and ultra-professional.” 

Reverse Mortgage Funding currently has a 4.6-star rating with nearly 70 reviews on LendingTree.com, many of which cite customer service through the application process and the long-term as perks of doing business with RMF. Leon of Grand Prairie, TX writes that, “My wife & I picked RMF after researching several companies and we are so glad we did. … our agent … painstakingly walked us through each step in the process. She left no stone unturned in her explanations pointing out the pros and cons of the process which is rare in the field of sales these days. I would recommend RMF hands down to family, friends, and anyone considering a reverse mortgage.”

Client Testimonials 

“… did a superb job faithfully providing the necessary paperwork and tirelessly working the phone and making sure our loan was done on time. We were thrown some last minute curveballs that could have set us back time wise, but Ed made it happen in spite of the obstacles.” 

“Joyce was the first call I received after signing up with LendingTree.com. From the very beginning she was friendly and professional. She answered all my questions throughout the process of securing a reverse mortgage.” 

“I would like to say how impressed I was with the professional attitude I received. After hearing RMF’s offer I chose to go with another company that agreed to match their offer. I had already formed a relationship and decided to go with them. The RMF rep agreed to send me the offer so I would be able to show it to the company I chose. This was very generous and I am grateful.” 

“Mortgage information documentation was excellent, and he spent a lot of time with me explaining my options. All my questions were answered within 24 hours – usually much less.”

Retirement Funding Solutions

Retirement Funding Solutions is a recent acquisition of Mutual of Omaha Bank, and previously did business under the name Synergy One Lending LLC. The loan options supplied by this lender are limited, and yet the power of their reputation has allowed them to maintain a spot among the top ten highest-volume HECM lenders of 2019. 

Retirement Funding Solutions’ website is as pared down and simple as the reverse mortgage products they offer, but still manages to provide a page full of tools for mortgage shoppers that we found highly useful. The RFS “Tools” page contains a list of calculators to help people who are considering an array of retirement scenarios better understand how certain financial strategies might affect them on a realistic level. 

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

Retirement Funding Solutions is a member of the National Reverse Mortgage Lenders Association, which requires lenders to uphold high ethical standards in order to earn their certification. RFS’ services are available in 48 states, currently excluding residents of West Virginia and New York. To talk about your options with a licensed specialist at Retirement Funding Solutions, call (877) 721-3847 or contact them online at RFSLends.com.

Products Offered by Retirement Funding Solutions

Reverse Mortgage Terms and FeaturesAdjustable Rate HECMFixed Rate HECMHECM for Purchase
Best UsesMore adaptable loan option for long-term retirement planningLower-interest loan option for immediate cash needsBuy a new home with no mortgage payments
Maximum Payout$726,525 $726,525 Based on the final sale price of your home
Federally InsuredYesYesYes
Non-RecourseYesYesYes
Lump Sum PayoutsYesYesN/A
Line of Credit PayoutsYesNoN/A
Monthly DisbursementsYesNoN/A
Combination PayoutsYesNoN/A

FHA-Insured Reverse Mortgages from Retirement Funding Solutions

Retirement Funding Solutions is an FHA-approved lender of government-backed HECM reverse mortgages, including adjustable and fixed rate HECMs as well as HECMs for new home purchases. Traditional HECMs are very heavily regulated to make the offerings of different lenders ultimately about the same. However, shoppers of HECMs should still apply with multiple lenders like RFS to find their best interest rate and to get a feel for the level of customer service that they can expect from each one. For comparison shoppers, Retirement Funding Solutions is a great option to start with as their NRMLA certification and its affiliation with the highly experienced Mutual of Omaha Bank gives it the kind of credentials that bring a reverse lender into the top ten.

Retirement Funding Solutions HECM options include:

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

To talk about your options with a licensed specialist at Retirement Funding Solutions, call (877) 721-3847 or contact them online at RFSLends.com.

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

Why We Recommend Retirement Funding Solutions

Retirement Funding Solutions is a member in good standing with the NRMLA, and while it is a smaller lender than some of our other top reverse mortgage lenders of 2019, we found it to be a very comprehensive and customer-friendly option. RFS offers tools on its website to help comparison shoppers find the right HECM option for them and learn all they can about these products. Among those tools are HECM estimate calculators and retirement planning calculators that allow applicants to account for how all of their current sources of income are likely to be affected by a reverse mortgage.

What Customers Are Saying

This lender has an A- rating with the Better Business Bureau and, though it is a smaller lender with relatively few consumer reviews online, Retirement Funding Solutions has maintained largely positive feedback for their level of customer service. On LendingTree.com, multiple reviewers have cited RFS’ commitment to customer care, such as Terry from Omaha, who stated that, “Mitch made the refi process so simple and quick for us. Felt like I made a friend for life. He kept us well informed on all issues and was very pleasant to work with.”

Client Testimonials 

“Eric was very, very knowledgeable about all aspects of the loan process and was very patient and articulate in answering any and all questions that my wife and I had. He answered every question within “literally” minutes of sending them to him, i.e. weekends, nights, e-mail, text. It didn’t matter when or in what form.” 

“The loan process isn’t always the easiest, but Jeff kept communications

open and was very efficient. He worked very hard to close in a timely manner

and ultimately got me a great loan.” 

“Could not have asked for a better end to an answered call one Saturday morning from an inquiry online!! You can’t go wrong here!!” 

“From the beginning of the loan process all the way through to the end, Eric went above and beyond to make this a hassle free experience.”

Fairway Independent Mortgage Corporation

Fairway Independent Mortgage offers traditional HECM reverse mortgages as well as multiple other financial solutions and is a particularly user-friendly lender to do business with. Fairway Independent is one of the most widespread lenders in our top ten, with multiple branches and broker locations in each state where it lends. However, this company really stands out by leveraging technology that makes it simple for reverse mortgage borrowers to stay in touch with their dedicated loan officer and in the know with their finances.

The FairwayNow app is deployed by Fairway loan officers across the country for their clientele to download. It is essentially like a personal banking app, but it allows consumers to stay up to date and in touch with their reverse mortgage funds, and includes tools that make it easy to contact your loan officer, see your application status, download and print documents and much more. Fairway’s loan officers also have their own pages within the Fairway Independent Mortgage Corporation website, and these offer locally relevant news, information, and contacts to each borrower for their specific state of residence.

Another incredibly helpful feature of Fairway’s website is its Resources section, which offers a comprehensive glossary of terms pertaining to all things lending. The website also happens to feature one of the most useful and user-friendly collections of financial tools that we have seen so far, offering everything from an interest rate calculator, to an early payoff planner, to a rent vs. own calculator.

Fairway Independent Mortgage Corporation is currently licensed to offer reverse mortgages in most states, for the moment excluding residents of Alaska and West Virginia. Though it may still lend in New York, Nevada and Hawaii, Fairway Independent does not hold loan servicing licensure in these states. This means that, if you’re a resident in one of these areas, getting a reverse mortgage with Fairway Independent may still be possible, but your customer service contacts will be with a cooperating organization throughout the life of your loan. 

To talk about a reverse mortgage with a licensed specialist Fairway Independent Mortgage, call (866) 912-4800 or contact them online at FairwayIndependentMC.com.

Products Offered by Fairway Independent Mortgage

Reverse Mortgage Terms and FeaturesAdjustable Rate HECMFixed Rate HECMHECM for Purchase
Best UsesMore adaptable loan option for long-term retirement planningLower-interest loan option for immediate cash needsBuy a new home with no mortgage payments
Maximum Payout$726,525 $726,525 Based on the final sale price of your home
Federally InsuredYesYesYes
Non-RecourseYesYesYes
Lump Sum PayoutsYesYesN/A
Line of Credit PayoutsYesNoN/A
Monthly DisbursementsYesNoN/A
Combination PayoutsYesNoN/A

FHA-Insured Reverse Mortgages from Fairway Independent Mortgage Corporation

Fairway Independent is licensed by the federal government to originate and service traditional HECMs (Home Equity Conversion Mortgages), which are heavily regulated and FHA-insured to keep rates and costs as low as possible. This regulatory environment renders HECMs from all lenders nearly the same, as rate and fee caps leave little room for variation. However, shoppers of HECMs should still apply with multiple lenders like Fairway to find their best interest rate and to take the opportunity to find out what each lender has to offer in terms of customer service and resources. 

Fairway Independent Mortgage Corporation’s HECM options include:

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

To talk about a reverse mortgage with a licensed specialist Fairway Independent Mortgage, call (866) 912-4800 or contact them online at FairwayIndependentMC.com.

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

Why We Recommend Fairway Independent Mortgage

What we appreciate most about this lender is its broad network of office locations in each state where it lends, as well as the fact that it leverages technology to make staying connected as simple as possible for borrowers. Using apps and a long list of broker-specific websites, Fairway Independent Mortgage creates multiple avenues for clients and applicants to reach a dedicated professional who is familiar with their personal circumstances. The customer support at Fairway was a large part of what made them one of our top ten reverse mortgage lenders of 2019.

What Customers Are Saying

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

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

Client Testimonials 

“… was very patient, answering all my questions and offering information to help me be more educated on the process and types of mortgages. Thanks to Brian we are able to pay off school loans and set my family up for a better financial future.” 

“When I choose a lender, my number one criteria is that they have experience working with investors. I often run into situations with my investments that require creative problem solving, and not all lenders are willing or able to work with me in that regard. Tim has always been eager to assist me with purchasing and refinancing rental properties, and is always two steps ahead of me when it comes to solving any issues that may arise.” 

“I am grateful to Nate Dillard for the never-ending effort and diligence he put into realizing my dream of homeownership. I believe that working with him and his team really made this process seamless and smooth. He was always very professional and available to answer any questions or concerns I had, working tirelessly to the end. I am very glad I chose you.” 

“Very professional, web portal for uploading/viewing/signing documents was very clear and easy to navigate. The loan officers were responsive and efficient, also very friendly.”

Longbridge Financial 

Longbridge Financial is one of our top lenders of both private and government secured reverse mortgages, offering a highly client-focused approach to both its lending practices and borrower counseling. We were impressed with the unusually high transparency of the marketing language on its website, but the main selling point for us is its client guarantee, which they call the Longbridge Commitment.

The Longbridge Commitment includes several points of interest to reverse mortgage comparison shoppers. Most notable are its offer of free identity theft protection and its pledge to let you know if a reverse mortgage is not a good fit for you. Longbridge also aims to keep applicants and current borrowers up to date with weekly check-ins and to close reverse mortgage loans within 45 days or less, which is nice, as this process is known to take up to 60 days or even longer if an applicant has financial complications. On top of all of that, Longbridge Financial always retains the servicing of its loans, which means you won’t be passed from servicer to servicer over the life of your reverse mortgage contract. 

The Longbridge website provides a broad range of consumer tools and resources that reflect Longbridge’s spirit of personal responsibility. These include an article that explains what’s involved in the reverse mortgage counseling sessions that are required before a reverse loan can be closed, as well as a piece about what to expect when repaying your loan. Its free loan calculator also allows users to input some basic information and get either an email or a call back to receive their quote.

Longbridge Financial is certified by the National Reverse Mortgage Lenders Association for its high standards of ethical business practice. It offers reverse mortgages for properties in most states, but to ensure that your state falls within their licensure, contact Longbridge to speak to a licensed counselor by calling (855) 523-4326 or by visiting Longbridge-Financial.com.

Products Offered by Longbridge Financial

Reverse Mortgage Terms and FeaturesLongbridge PlatinumAdjustable Rate HECMFixed Rate HECMHECM for Purchase
Best UsesAccess equity in a high-value home or condo More adaptable loan option for long-term retirement planningLower-interest loan option for immediate cash needsBuy a new home with no mortgage payments
Maximum Payout$4,000,000$726,525 $726,525 Based on the final sale price of your home
Federally InsuredNo — private insurance availableYesYesYes
Non-RecourseYesYesYesYes
Lump Sum PayoutsYesYesYesN/A
Line of Credit PayoutsNoYesNoN/A
Monthly DisbursementsNoYesNoN/A
Combination PayoutsNoYesNoN/A

The Longbridge Platinum Private Reverse Mortgage

Longbridge Platinum allows owners of high value, single family homes and condos to access more of their equity than a traditional, government regulated reverse mortgage would allow. This loan offers a lump sum payout that borrowers take in the first year of the contract, and while a traditional HECM would limit a lump sum amount to just 58 percent of the available loan, Longbridge Platinum makes the full loan amount available to you as soon as you close. 

As it is a private loan offered by Longbridge, the Platinum reverse doesn’t come with insurance premiums and fees, but private insurance is available for Platinum applicants. HUD counseling is not required to apply for this reverse mortgage, but Longbridge does provide counseling by a licensed specialist and suggests that all prospective borrowers seek the counseling of an independent financial advisor before applying.

To speak to a licensed counselor, call Longbridge at (855) 523-4326 or visit Longbridge-Financial.com.

The Longbridge Platinum private reverse mortgage offers:

  • Available for seniors 62 and older
  • Loan amounts up to $4,000,000
  • No monthly servicing fees to add interest to your debt
  • Low upfront costs with options for no origination fees
  • No first-year withdrawal limits
  • Condominium communities more likely to be eligible
  • Streamlined approval process

Requirements to qualify:

  • Must be 62 years of age or older
  • Must have all or most of your mortgage paid down
  • Property must be high value 
  • Must meet with a licensed counselor to apply
  • Must undergo a financial assessment and credit check
  • Property must be your primary residence

FHA-Insured Reverse Mortgages from Longbridge Financial

Longbridge Financial is an FHA-licensed lender of traditional HECM reverse mortgages, including adjustable and fixed rate HECMs as well as HECMs to help with new home purchases. Traditional HECMs are very heavily regulated, making the offerings of different lenders about the same in terms of the costs to the borrower. However, shoppers of HECMs should still field offers from multiple vendors to ensure that they find their best possible rates and to get some idea of the customer service atmosphere that each lender can offer. Longbridge Financial’s NRMLA certification and its highly competent approach to customer care makes it one of our best lenders to comparison shop with in 2019.

Longbridge Financial’s HECM options include:

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

To talk about your options with a licensed specialist at Longbridge Financial, call (855) 523-4326 or go online to visit Longbridge-Financial.com.

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

Why We Recommend Longbridge Financial

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

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

What Customers Are Saying

This lender has maintained an A+ rating with the Better Business Bureau and, while Longbridge Financial is not a large lender, there are mostly positive customer reviews for them on sites like BBB.org touting the high transparency and supportive customer care that Longbridge provides. A Better Business Bureau reviewer identified only as Rick stated that, “We looked at four reverse mortgage lenders and carefully (painstakingly) chose Longbridge. Their agent was very knowledgeable and gave us a no BS review of their product.” Other reviewers have gone to sites like Trustpilot.com to express their satisfaction with Longbridge’s client care, like Virgil Claycamp, who stated that, “The whole process was very low key, no pressure, easy and surprisingly quick.”

Client Testimonials 

“I was very skeptical of reverse mortgages. I had entered some information on a website but was disappointed to find the amount of equity that could be taken and the amount left in the house unavailable. George Blackburn was very helpful and patient with helping me learn the many benefits of a reverse mortgage with Longbridge.” 

“Overall the experience has been very positive. It is a program that more people would take advantage of if they knew about it or understood it better.” 

“First time I ever did a long distance process and it went smooth. I’m used to talking in person. I can’t say enough about this company. Use them with confidence. I shopped around with other reverse mortgage companies. Longbridge was the best. When I told the other companies I was going with Longbridge they said they were a good Co. Nice response from the competition.” 

“Saher’s patience, hand holding and ability to make one secure in life changing transactions, and knowing I could count on Saher and Longbridge for support long after closing, made all the difference in the world!!”

Reverse Mortgages.com

Reverse Mortgages.com, otherwise known as Mid-Continent Funding, is one of the smaller lenders on our list, and yet Reverse Mortgages.com has maintained a solid top ten average for its sheer volume of HECM reverse mortgage closings throughout 2019. It offers FHA-approved reverse mortgages and a clean, straightforward website where you can learn all about traditional reverse mortgages, get a no-obligation estimate, or contact a licensed specialist to talk about applying. 

While Reverse Mortgages.com is not certified by the NRMLA, it is part of an organization called the National Aging in Place Council, which advocates for seniors by upholding a code of conduct among all of its certified eldercare providers. This lender demonstrates its dedication to a client-first approach by providing plain-spoken and detailed information on their website, including a reverse mortgage calculator, a library of informational videos and a Reverse Mortgage Blog full of details about senior benefits, healthcare, and other relevant topics.

According to NMLS Consumer Access — a national licensure and regulatory action database for mortgage shoppers — Reverse Mortgages.com is currently licensed to offer FHA-secured HECM reverse mortgages in 38 states, though Mid-Continent Funding also offers various private products across the country. To find out if Reverse Mortgages.com offers HECM reverse mortgages in your state, call (877) 611-1329, or contact them online at ReverseMortgages.com.

Products Offered by Reverse Mortgages.com

Reverse Mortgage Terms and FeaturesAdjustable Rate HECMFixed Rate HECMHECM for Purchase
Best UsesMore adaptable loan option for long-term retirement planningLower-interest loan option for immediate cash needsBuy a new home with no mortgage payments
Maximum Payout$726,525 $726,525 Based on the final sale price of your home
Federally InsuredYesYesYes
Non-RecourseYesYesYes
Lump Sum PayoutsYesYesN/A
Line of Credit PayoutsYesNoN/A
Monthly DisbursementsYesNoN/A
Combination PayoutsYesNoN/A

FHA-Insured Reverse Mortgages from Reverse Mortgages.com

Reverse Mortgages.com is a state-licensed and FHA-approved lender of traditional HECM reverse mortgages, which are insured by the federal government. FHA insurance of a reverse mortgage ensures that if your lending institution should fail for any reason or if the value of your home goes down too significantly to pay back your loan when it’s time to sell or pay the loan off by other means, you’re still covered. 

Government regulation also serves to keep lending rates and costs for HECMs low. Though this does result in there being little variation between the products you’ll find from different lenders, it’s still always the best policy to comparison shop by applying with multiple lenders in your area.

To find out if Reverse Mortgages.com offers HECM reverse mortgages in your state, call (877) 611-1329 or contact them online at ReverseMortgages.com.

Reverse Mortgages.com HECM options include:

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

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

Why We Recommend Reverse Mortgages.com

Reverse Mortgages.com is possibly the smallest lender on our list of the top ten reverse mortgage lenders of 2019, though it currently does business in 38 states and has managed to close more reverse mortgages this year than the majority of other lenders. This company, otherwise known as Mid-Continent Funding, is clearly growing its coverage area and client base in the reverse mortgage market.

When a financial institution is in a growth stage, most double their efforts to provide exemplary customer service so that consumers know they can be trusted. Reverse Mortgages.com has followed suit and their clients have noticed: “I found ReverseMortgages.com on the Internet and inquired for information. We were contacted by *******. She was a true professional from the beginning. She sent us a packet of relevant generic information on reverse mortgages which was very helpful. She then gave us a Truth in Lending form which is required. She took time to visit with my wife and me over the phone and answered all of our questions. There was never any sales pitch other than answering my questions.”

What Customers Are Saying

This lender has an A+ rating with the Better Business Bureau, and on the BBB website, Reverse Mortgages.com has maintained a more than four-star rating with 17 reviews, which is more than most of our top lenders have received with the Better Business Bureau. A common theme in this lender’s reviews is a practice of transparency and ample support in customer service: “Ours was a pleasant experience from start to finish. We got calls and emails telling us what was needed to complete our mortgage, always in a clear and courteous manner. The mortgage was completed in a timely manner, much more quickly than we expected.” 

Reverse Mortgages.com has also received high marks for their customer support on various review websites, such as Trustpilot, where reviewers have noted the personal support they received from this lender’s agents: “Abigail did a great job of handling everything from the beginning — where I just had lots of questions — to the approval and completion. The appraiser, John, and the notary, Ken, were great.”

Client Testimonials 

“My husband and I recently purchased a home with reverse mortgage financing. Because we were using Reverse Mortgages.com, we were somewhat concerned because we were not meeting face-to-face with loan officer. However this proved to be a very simple and uncomplicated process. We were treated with the utmost of professionalism.” 

“I would recommend that team to anyone of my friends that were seniors who even wanted to refinance and keep their present residence or sell their home and purchase a new home.” 

“Companies such as yours are most about PEOPLE. The PERSON on the other end of the computer or phone is really all that counts. Some people are better than others. All of the people I dealt with at ReverseMortgages.com were above average indeed.” 

“Great experience! ****** did an excellent job throughout the whole process from initial inquiry to closing the loan. Very competitive rates.”

Quontic Bank

Quontic Bank FSB is not a reverse-only lender like some of the other entries in our list of the top reverse mortgage providers of 2019. It is a traditional, brick-and-mortar bank, and one that has embraced the 21st century to offer consumers a comprehensive and user-friendly option for HECM reverse mortgages. 

While Quontic has originated somewhat fewer reverse mortgages this year than the other lenders we’ve covered, it has a national reputation as a long-standing institution, and their broad list of accolades from professional organizations in banking clearly demonstrates the level of professionalism that you can expect from Quontic.

Quontic’s website is as comprehensive and user-friendly as our top reverse mortgage lenders for this year, with plenty of tools to help reverse mortgage shoppers calculate their likely payout or find information from institutions like the National Reverse Mortgage Lenders Association, the Department of Housing and Urban Development, the Better Business Bureau and other reputable sources. Quontic also provides a reverse mortgage pros and cons article to help consumers understand if a reverse is truly their best option and offers a high-detail rundown of the rates you can expect.

This lender is licensed by the FHA to offer traditional reverse mortgages in all 50 states and is a current member of the National Reverse Mortgage Lenders Association, which certifies its members for upholding high ethical standards in their business practices. To talk about your options with a licensed specialist at Quontic Bank, call (800) 908-6600, or contact them online at QuonticBank.com.

Products Offered by Quontic Bank

Reverse Mortgage Terms and FeaturesAdjustable Rate HECMFixed Rate HECMHECM for Purchase
Best UsesMore adaptable loan option for long-term retirement planningLower-interest loan option for immediate cash needsBuy a new home with no mortgage payments
Maximum Payout$726,525 $726,525 Based on the final sale price of your home
Federally InsuredYesYesYes
Non-RecourseYesYesYes
Lump Sum PayoutsYesYesN/A
Line of Credit PayoutsYesNoN/A
Monthly DisbursementsYesNoN/A
Combination PayoutsYesNoN/A

FHA-Insured Reverse Mortgages from Quontic Bank

Quontic is a traditional bank, so it is equipped to counsel reverse mortgage shoppers in person at one of its many branch locations, as well as over the phone and online. Its HECM offerings are FHA-approved, which means they are heavily regulated to be a low-cost option for seniors. While you may find slightly different interest rates and fees from other lenders, possibly the most important thing to shop for in your search for your best HECM option is comprehensive customer service, and with its history as one of the healthiest banks in the country, Quontic has that in spades. 

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

Quontic’s HECM options include:

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

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

Why We Recommend Quontic Bank

Quontic Bank stands out for us because it has a long history as a brick-and-mortar institution, offering many different types of financial products, including personal banking. Though Quontic has originated fewer reverse mortgages in 2019 than the other lenders we have covered thus far, the customer service environment that this lender can offer surpasses many others — especially those that do business only online or over the phone. Quontic has locations all over the country where they service reverse mortgage loans, student loans, traditional mortgages, and many other products.

Consumers have reviewed Quontic very positively on sites like BBB.org and Lending Tree, like Bill I. in Long Island, who stated, “I am not one to write reviews but I would be remiss if I did not praise the work of Quontic Bank in general and in particular, Michael B****** and his staff on Long Island . In helping us to buy our house, they went out of their way to be courteous, helpful, and creative. Even when we threw them a few late changes, they never complained but simply found a way for things to work.”

What Customers Are Saying

This lender has an A+ rating with the Better Business Bureau and nearly a five-star rating on the BBB.org website from 19 reviewers. David D. writes, “I just had my home refinanced through Quontic Bank with the help of Alex B***. He did an extraordinary job of leading me through each phase of the process. He was on top of every detail. He made sure that I understood every step of the process. He is very knowledgeable with what he does. He was very prompt with what he could. I was very pleased with the service.”

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

Client Testimonials 

“I feel I was very lucky in doing my Reverse Mortgage with Vinnie Smith from your office in Indiana. Without meeting him in person, he made me feel confident that I was doing the right thing for my situation. Throughout the process he remained patient with me and all my questions even though I was quite repetitive. I commend Quontic Bank for hiring him. It was an excellent choice.” 

“I want to compliment the work of Kory C******. He managed my application for a reverse mortgage. He did an extraordinary job of leading me through each phase of the process. He was on top of every detail. He made sure that I understood every step of the process. He is very articulate at what he does. There were some issues along the way but he was always one step ahead of the issues and proactively followed up on the details.” 

“Texas Lending made us feel uncomfortable with actions and narrative going on so we withdrew. A third try this summer gave us Quontic Bank and Megan Hardin. Our first conversation with Megan gave us a good feeling that she is someone who understands what we’ve been going through and would do all she could do to refinance our home.” 

“Kory C****** was exceptional when it came to handling my reverse mortgage. I am in real estate and have dealt with a lot of lenders and I have to give Corey an A+ for what he did for me. Not only did he handle the transaction nicely but he passed on a personal experience to me which I really appreciate. I have never dealt with a vendor that it’s not in front of my face but Cory did an exceptional job for me.”

Reverse Mortgage Basics

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

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

Reverse Mortgage Eligibility Requirements

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

Reverse mortgage eligibility requirements for applicants:

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

Age and Spousal Regulations

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

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

HUD and FHA Property Standards 

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

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

Reverse Mortgage Property Eligibility FAQs

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

The FHA states that for a property to be considered your “primary residence”, you must live in the home for a majority of each year throughout the life of your reverse mortgage loan. In the event that you must move for a time and live outside of your reverse mortgaged property, if you live elsewhere for the majority of one year, then your loan may come due prematurely. The same can happen if you must move into a nursing home or assisted living facility and stay there for 12 consecutive months. For more information on what is likely to happen in these cases, take a look at this article from ConsumerFinance.gov.

If your property is a single-family home, a manufactured home that meets FHA requirements, a HUD-approved condominium or a two- to-four-unit home where you occupy one unit as your primary residence, then your property has the potential to qualify for an HECM reverse mortgage.

This question can be a tricky one. The vast majority of condominiums in the U.S. are not approved by the FHA to be reverse mortgaged. This is because, for one homeowner’s condo to be approved, the entire complex must be approved as well, requiring condo owners and homeowner’s associations to find and compile a daunting amount of information on how the majority of the units in their complex are occupied, built and mortgaged. In all cases, this is a lengthy and costly process, so for most homeowners and HOAs, finding this information is too large a task and not worth the trouble. However, about 10 percent of American condo complexes are already approved. To find out if your complex is FHA-approved, contact your homeowner’s association.

If you have taken advantage of the federal government’s Home Energy Renovation Opportunity (HERO) to lower your utility bills with the addition of solar panels, you can still qualify for an HECM. However, HERO and PACE funding is considered federal debt. You’ll be required to pay off that debt using the proceeds from your reverse mortgage.

Remaining Mortgage Balancesaboust set-aside

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

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

Income and Credit Assessments

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

Income sources that are commonly assessed include:

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

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

About Set-Aside Accounts

Set-aside accounts can be a voluntary feature of a reverse, but lenders often require a life expectancy set-aside (LESA) account to be formed as part of a reverse mortgage for borrowers who have derogatory credit or a poor debt to income ratio. A set-aside is a portion of your available reverse mortgage loan that is “set aside” in case you cannot pay for things like home insurance or property taxes. 
A LESA effectively reduces the total amount you will be able to receive from your reverse mortgage loan, and the amount that is set aside will be based on the age and life expectancy of the youngest borrower on the contract. If set-aside funds run out, you will still have to pay for your home’s upkeep, insurance, homeowner’s association fees, and property taxes. Servicing fees can also be drawn from set-aside accounts for reverse mortgages that render payments to the borrower on a monthly basis.

Obligations of Reverse Mortgage Borrowers

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

Your obligations as an HECM reverse mortgage borrower include:

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

Pre-Application Counseling

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

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

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

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

The Department of Housing and Urban Development

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

The AARP

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

The Consumer Financial Protection Bureau

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

Types of Reverse Mortgages

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

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

Fixed Rate HECMs

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

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

Adjustable Rate HECMs

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

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

HECMs for Purchase

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

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

Single-Purpose Reverse Mortgages

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

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

Proprietary (Privately Offered) Reverse Mortgages

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

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

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

About Mortgage Insurance Premiums
FHA insurance protects consumers in the event that their lending institution fails or their home loses value over the course of their contract. In cases where the latter occurs, the final balance due to repay the HECM loan will not exceed 95 percent of the home’s fair market value at the time of sale, and insurance premium payments will be used to cover the portion of the balance exceeding that amount.

The FHA requires HECM borrowers to add mortgage insurance premium payments to their reverse mortgage costs and fees, due when the loan is repaid once the home is sold. Insurance charges include an up-front fee of 2 percent of your home’s appraised value or of the maximum HECM loan amount of $726,525 (whichever is lower) and ongoing premiums of 0.5 percent of the outstanding loan balance. Premium payments are no longer added to the balance of the loan once the five-year point of a contract is reached or the total balance reaches 78 percent of the property value. 

Who Should Consider a Reverse Mortgage?

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

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

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

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

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

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

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

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

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

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

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

Do you plan to leave your home to an heir?

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

How long do you plan to live in your home?

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

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

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

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

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

Costs of a Reverse Mortgage

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

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

Up-Front Fees 

Counseling Fees

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

Closing Costs

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

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

Appraisal Fees

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

Loan Origination Fees

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

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

Initial Mortgage Insurance Fee 

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

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

Ongoing Fees

Interest

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

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

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

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

Mortgage Insurance Premiums

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

Service Fees

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

Buyer’s Guide: How to Choose a Reverse Mortgage

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

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

Get financial counseling with a HUD representative. 

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

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

Meet with a financial advisor.

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

Research lenders’ backgrounds.

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

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

Start fielding offers.

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

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

Comparison Shopping with Referral Services

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

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

Tips for Caregivers

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

Talk to your loved ones about their assets.

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

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

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

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

Confirm the age of the youngest borrower.

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

Find all applicable income sources.

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

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

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

Find the total amount of your loved ones’ debt.

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

Ask to be included. 

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

Locate all relevant documents.

The following is a list of the documents that your friend or parent will need to present during the reverse mortgage application process. It comes to us courtesy of Casey Chisholm who writes for our top lender of 2019, One Reverse Mortgage.

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

Talk about reverse mortgage scams.

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

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

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

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

Offer help and support with technological tools.

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

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

Finding Reverse Mortgages for Low-Income Seniors

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

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

Costs and Fees of Single-Purpose Reverse Mortgages

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

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

Finding a Single-Purpose Reverse Mortgage

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

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

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