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

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

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

Money’s Main Takeaways
A reverse mortgage can be a good idea for those 62 and older if the homeowner can meet the reverse mortgage requirements and plans to stay in the house long term. However, your heirs will have to pay off the reverse mortgage balance if they wish to retain the home when you leave the house or pass away. A reverse mortgage is not such a good idea if you may have to move out soon due to health issues, your spouse is not yet 62, or you have friends and family living with you. Our Top Picks for Best Reverse Mortgage Companies

Best Reverse Mortgage Reviews

Low interest rates
Informative website with lots of resourcesJumbo loans go down to age 55Remains your servicer after closing2019 regulatory action regarding licensing in California55+ loans not available in every stateMortgage applications for properties in the state of New York cannot be processed on the website

HIGHLIGHTS

ProductsHECM, HECM for purchase, jumbo loansLoan amountsUp to $4 millionStates served50 plus Washington, D.C.

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

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

The company also has great customer reviews and few complaints, and it remains your servicer after closing — meaning you’ll do business with the same company for as long as you have the loan. For more information, read our full review of Longbridge Financial Reverse.

Wide product varietyJumbo loans go down to age 55Informative website with lots of resourcesA+ BBB ratingRemains your servicer after closingJumbos not available in every state55+ loans not available in every stateLimited brick-and-mortar locations for in-person appointmentsMortgage applications for properties in the state of New York cannot be processed on the website

HIGHLIGHTS

ProductsHECM, HECM for purchase, jumbo loans, Equity Avail proprietary mortgage, home-sharingLoan amountsUp to $4 millionStates servedAll 50 states, plus D.C.

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

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

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

FAR also offers a home-sharing program called Silvernest. The program matches seniors with rent-paying housemates so they can earn income and put more money toward retirement goals. It can be used in tandem with FAR’s reverse mortgage offers. For more information, read our full review of Finance of America Reverse.

Quick closing times for HECM for purchasesHundreds of brick-and-mortar locationsGood customer reviews and an A+ BBB ratingLots of educational resources and toolsJumbo loans go down to age 55Does not remain your servicer after closing55+ loans not available in all statesMortgage applications for properties in the state of New York cannot be processed on the website

HIGHLIGHTS

ProductsHECM, HECM for purchase, jumbo loansLoan amountsUp to $4 millionStates servedAll 50 states, plus D.C.

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

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

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

Online dashboard for getting and managing your loanDozens of brick-and-mortar locationsA+ BBB ratingLots of online resources, videos and toolsDoes not serve Alaska, Maine, Massachusetts and New York

HIGHLIGHTS

ProductsHECM, HECM for purchase, Jumbo and 55+ loansLoan amountsUp to $1,089,300States served46 states, plus D.C.

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

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

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

Great customer ratings and reviewsInformative website with lots of educational resourcesSpecializes in reverse mortgage lendingCharged with deceptive advertising practices by the CFPBDoes not service MassachusettsJumbo loans appear to be discontinuedNo 55+ loansNo brick-and-mortar locations

HIGHLIGHTS

ProductsHECM, HECM for purchase, mortgage refinancingLoan amountsUp to HECM limitStates served49 states (not Massachusetts)

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

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

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

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

For more information, read our full review of American Advisors Group.

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Other companies we considered
All Reverse Mortgage
Lowest interest ratesARLO, a reverse mortgage calculator that offers an instant quoteExcellent consumer ratingsNot available in all states

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

For more details, read our full review of All Reverse Mortgage.

Why we didn’t choose it: Its geographic service area — just 13 states — was too small. For consumers in the states it does service (California and Texas, to name a few), the company is worth a look.

American Senior/HighTech Lending
HECM, HECM for Purchase and jumbo Reverse MortgagesRefinance reverse mortgages availableCompetitive interest ratesNot available in all statesFew independent customer reviewsDeceptive advertising charges filed by the state of California in 2017

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

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

Liberty Reverse Mortgage
HECM and HECM for purchase loansLow interest ratesEasy eligibility calculatorLarge number of regulatory actions compared to other lendersNo jumbo loan optionsMortgage applications for properties in the state of New York cannot be processed on the website

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

For more details, read our full review of Liberty Reverse Mortgage.

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

Nationwide Equities Corporation
Full range of reverse mortgage optionsProprietary co-op reverse mortgage optionCompetitive interest ratesAvailable in only 16 statesA 2021 enforcement action with the CFPB regarding deceptive advertising practices

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

Why we didn’t choose it: Their small reach (just 14 states), plus allegations of deceptive advertising from the CFPB in 2021 are what pushed the company out of the running.

Reverse Mortgage Guide

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

What is a reverse mortgage?

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

How does a reverse mortgage work?

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

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

You can take out a reverse mortgage on several types of real estate, including a single-family home, a multi-unit property that you currently live in, a townhouse or a condo (with HECMs, it must be an FHA-approved condo).

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

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

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

Reverse mortgage rules

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

For HECMs:

Meet the minimum age requirement of 62 Have a substantial amount of equity in the home The house must be your primary residence Complete the mandatory reverse mortgage counseling with a non-profit housing counseling agency Stay current on property taxes, HOA fees and home insurance premiums

For proprietary jumbo loans:

Meet the minimum age requirement of 55 Meet lender credit and income standards Have enough equity in your home Selling a house with a reverse mortgage

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

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

How to get out of a reverse mortgage

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

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

Types of reverse mortgages

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

Here’s how those differ:

HECMs: HECMs are reverse mortgages that are insured by the federal government — specifically the Federal Housing Administration — and issued by FHA-approved lenders. HECM for purchase: Government-backed loans designed solely for purchasing a home versus leveraging the equity in one you already own. Proprietary reverse mortgages: These are private mortgage loans that are unique to the lender offering them. Some lenders call them jumbo reverse mortgages, as they usually have higher limits than HECMs. Single-purpose reverse mortgages: The loan proceeds from single-purpose reverse mortgages can only be used toward one specific purpose — like covering home improvements or paying property taxes.

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

How to choose a reverse mortgage lender

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

When choosing a mortgage lender, you should:

Understand your needs. Think deeply about why you want a reverse mortgage. Is it for a specific purpose, like repairing your house or buying a new home? Or do you need extra cash flow each month to support yourself in retirement? This can point you toward the right type of reverse mortgage loan — and lender — for your goals. Look for lenders that are members of the National Reverse Mortgage Lenders Association (NRMLA). This organization has an established designation — and corresponding code of ethics — for lenders offering reverse mortgages. It also provides educational resources for consumers on the pros and cons of this type of loan. Get quotes from different lenders. Reverse mortgage companies can differ quite a bit in pricing, so it’s important to get quotes from several to ensure you’re getting the best deal. Compare rates and fees. Go through the loan estimates from each lender. Pay particular attention to the interest rate and any upfront fees, origination fees, closing costs, servicing fees and mortgage insurance premiums. Read customer reviews and ratings. The Better Business Bureau and Trustpilot are great resources for gauging customer sentiment about a company. Be wary of aggressive sales tactics. Heed these tips for avoiding reverse mortgage scams, and if something feels off or suspicious, report the lender to the Federal Trade Commission and your state’s attorney general.
Reverse mortgage pros and cons

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

Increase cash flow
Supplement income
Tax free
Non-recourse loans
Closing costs
Risk of foreclosure
Impact on eligibility for other benefits
Complications for heirs

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

Latest News in Reverse Mortgages and Mortgage Lending
While mortgage rates have recently come down, the market is still tough. Current mortgage rates may have come off their recent highs, but they still remain above 7%, and homebuyers continue to face affordability issues. Many experts believe rates will ease lower in 2024, although there won’t be a significant drop. Seniors looking to relocate or downsize are facing a very different housing market than earlier this year. Soaring mortgage rates and not enough homes for sale have kept home prices elevated, making affordability a major problem. Since last summer, homebuyers have lost over $70,000 in buying power. It’s also a tough market for home sellers. Nearly 16% of buyers who signed a purchase agreement have canceled the sales contract at the last minute, leaving sellers empty-handed and having to start the sale process over again.

Reverse Mortgage FAQs

How do you pay back a reverse mortgage?

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

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

How much money do you get from a reverse mortgage?

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

How does a reverse mortgage work when you die?

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

Is a reverse mortgage a ripoff?

Reverse mortgage scams are out there, but they’re not the norm. As long as you understand how these loans work, choose an experienced and vetted mortgage company and use a reverse mortgage calculator to gauge the costs and financial repercussions, a reverse mortgage can be a useful tool for many homeowners.

The federal government has also taken steps to protect reverse mortgage borrowers in recent years. In 2021, the CFPB took action against at least two lenders for misleading advertising practices, and HUD also provided extra protections for non-borrowing spouses.

What is the downside of a reverse mortgage?

The biggest downside of a reverse mortgage is that it puts your home at risk of foreclosure if you don’t keep up with property taxes, insurance, HOA dues or home maintenance. Your heirs also stand to inherit less with a reverse mortgage, and there are many costs to consider, too — including interest, mortgage insurance, servicing fees and more.

Reverse mortgages can also impact your eligibility for Medicaid and Supplemental Security Income (SSI) — though not Medicare or traditional Social Security benefits.

How We Evaluated the Best Reverse Mortgage Companies

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

Products offered: We looked for companies with a variety of loan options, including fixed- and adjustable-rate loans, jumbo loans and loans for homeowners under age 62. Customer reviews: We favored lenders with strong customer ratings and few complaints. Regulatory actions: We favored companies with few regulatory actions against them — particularly actions that pertain to customer service and sales/advertising practices. Geographic accessibility: We considered the geographic reach of companies and favored those that serviced the most U.S. states and territories. Online presence: We looked for lenders with robust web presences that inform and engage potential reverse mortgage borrowers.

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

Summary of Money’s Best Reverse Mortgage Companies of December 2023

Original: Money.com: Best Reverse Mortgage Companies of December 2023