Best reverse mortgage companies of 2023
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With the cost of living increasing so dramatically, many seniors and older Americans are worried about retirement and whether or not their golden years will go as planned. Does this sound like you? Do you have a lot of equity in your home? Then a possible solution is a reverse mortgage.
All Reverse Mortgage Inc. (ARLO)
Quick Facts
Loan limit: $4,000,000
Available in all states: No
Best reverse mortgage company for transparency
All Reverse Mortgage Inc., or ARLO, is based in Orange, California. They focus exclusively on reverse mortgages and are licensed to operate in 15 states. ARLO’s reverse mortgage calculator provides upfront information to help you easily compare interest rates, closing costs, and amortization schedules.
ARLO offers a broad selection of reverse mortgages and income methods. Borrowers can receive funds as a lump sum, term payment, or line of credit. Additionally, their products span purchase, standard, and jumbo reverse mortgages. Their current interest rates are published directly on their website and are available as adjustable or fixed-rate.
Customer reviews praise ARLO's knowledgeable staff and smooth application process. They hold an A+ rating on BBB with a great 4.98 out of 5 stars based on over 100 reviews. Though not a nationwide lender, ARLO offers competitive rates and strong customer service for borrowers in their operating states.
Fairway Independent Mortgage Company
Quick Facts
Loan limit: $4,000,000
Available in all states: No
Best reverse mortgage company for fast closing
Fairway Independent Mortgage Corporation is a nationwide mortgage lender offering reverse mortgages in 49 states, just missing New York. The company has been in business for over 25 years and has hundreds of nationwide branch locations.
Fairway offers several types of reverse mortgages, ranging from purchase, jumbo, and standard options. Their HECM for Purchase is a standout, potentially able to close within 17 days. Most other reverse reverse mortgage lenders take 30 to 60 days.
As one of the largest mortgage lenders in the U.S., Fairway has funded over $40 billion in loans. However, they don’t list interest rates or costs online. Overall, reviews praise Fairway's clear communication and smooth process. Their BBB rating is 4.93/5 based on over 1,200 reviews.
Open Mortgage LLC.
Quick Facts
Loan limit: Not listed
Available in all states: No
Best reverse mortgage lender for in-person visits
Open Mortgage is a multi-channel mortgage lender headquartered in Austin, Texas. Founded in 2003, Open Mortgage funded over $1.1 billion in home loans in 2022. The company has 70+ branch locations across 26 states and over 300 employees, making it a good option for those wanting to visit in person.
They only offer two types of reverse mortgages: for purchases and retirement. While they don't publicly release interest rate and fee information, they offer many other types of mortgages. Open Mortgage assigns one loan officer to work with you throughout the process, potentially making things easier. A 4.1 rating from Birdeye reveals different experiences depending on your loan officer.
Customers have praised individual representatives for their professionalism, efficiency, and helpfulness in navigating the mortgage process. However, there are also instances of dissatisfaction, highlighting the importance of individual experiences in shaping overall perceptions of the company. Customers benefit from the ability to change loan officers if unhappy.
Nationwide Equities Corporation
Quick Facts
Loan limit: $4,000,000
Available in all states: No
Best reverse mortgage company for alternative options
Nationwide Equities offers reverse mortgages in 17 states. The company provides multiple reverse mortgage products, including standard HECMs for purchase and retirement, decreased age reverse mortgages, co-op reverse mortgages, and refinancing.
Their refinancing and co-op reverse mortgages should be emphasized, as they’re uncommon products. Co-operative housing has unique ownership structures, resulting in decreased mortgage options. However, Nationwide Equities offers co-op reverse mortgages specifically for New York.
Their refinancing option can also be attractive to those who want to potentially lower their interest rates. Additionally, their EquityPower reverse mortgage decreases the required age limit to 55. Most other lenders require a minimum age of 63 to qualify for a reverse mortgage.
Aside from reverse mortgages, Nationwide offers traditional home purchase mortgages and refinancing options. The company has been in business for over 24 years and holds an A+ rating with the Better Business Bureau, although with only three reviews. Additionally, Nationwide has faced regulatory action for unlawful advertising practices.
Longbridge Financial
Quick Facts
Loan limit: $4,000,000
Available in all states: No
Best reverse mortgage loan for low interest rates/fees
Longbridge Financial is a reverse mortgage company that is 100% online, which means there are no in-person support options. However, don’t let that fool you. Their reputation for customer service is still top-notch and they maintain an A+ reputation with the Better Business Bureau.
Longbridge Financial specializes in reverse mortgages only and offers three different product options; a HECM reverse mortgage, a HECM for purchase reverse mortgage for those looking to buy a home that better fits their needs, and platinum mortgage for homeowners aged 55+ who own a higher-value home or condo.
Longbridge Financial is available in 49 states (not Hawaii) and offers loan amounts up to $4,000,000. Despite the lack of in-person support, the website is fully loaded with materials, including a free information kit for those looking to educate themselves on reverse mortgages and how they work. When it comes to fees, Longbridge Financial charges origination and service fees. Origination fees are basically fees an organization charges customers for taking out a loan, and some of Longbridge’s programs may allow you to waive this fee. Lastly, military veterans and service members can take advantage of a $500 discount.
Despite these standard costs, Longbridge does not charge HECM borrowers a servicing fee. This can save you upwards of $35 a month.
American Advisors Group
Quick Facts
Loan limit: $4,000,000
Available in all states: Yes
Best reverse mortgage company for ease of qualification
Perhaps the best-known option for reverse mortgage products is American Advisors Group. This is a national reverse mortgage company that offers its products in all 50 states.
American Advisors Group offers several types of reverse mortgage loans including lump-sum payouts, a growing line of credit, jumbo loans (up to $4,000,000), term or tenure, and reverse for purchase loans. If you are unsure of which one will work best for you and your needs, you can get in touch with an American Advisors Group equity solutions specialist, who will help explain all the options to determine which one is the best fit for you. The ability to chat with a specialist makes it easier to know what you can qualify for and is something that makes this company stand out.
However, you pay the price (literally) for the nationwide access and support options. The fees can be a bit higher than some of the competition so do your research and ask questions as they may waive the service fee to help lower costs.
Finance of America Reverse
Quick Facts
Loan limit: $4,000,000
Available in all states: Yes
Best reverse mortgage for product variety
When it comes to product variety, Finance of America Reverse takes the top spot for all of its options. These include HECM, HECM for purchase, jumbo loans, Equity Avail property mortgage, and home-sharing.
The diversity of these products means that there is something for everyone. Individuals who perhaps can’t qualify for a traditional HECM can look at the proprietary EquityAvail option. Finance of America Reverse describes it as a “retirement mortgage” and it allows borrowers to keep their monthly housing costs lower with age. The home-sharing option, which is called Silvernest, will match senior homeowners with renters to allow them to earn an income to help supplement their retirement goals.
Finance of America Reverse is available in all 50 states and offers a few of its products to individuals as young as 55, which is quite a few years younger than most other reverse mortgage products allow. Keep in mind that the age limits and products may vary by state.
Loans are available up to $4,000,000 and rates are very competitive, and include a price match guarantee. There are not many brick-and-mortar locations, but Finance of America Reverse has excellent ratings and reviews when it comes to customer service both over the phone and online via email.
Mutual of Omaha
Quick Facts
Loan limit: $4,000,000
Available in all states: No
Best reverse mortgage for online options
A reverse mortgage is just one of the many products offered by Mutual of Omaha Bank, and their 4.3 review rating on TrustPilot indicates that the reverse mortgage product is top-notch. Clients also compliment the helpful staff, smooth process, and easy-to-use app and website.
Mutual of Omaha Bank offers four different products for reverse mortgages. These are; a HECM reverse mortgage, HECM for purchase and refinance loans. A big advantage that Mutual of Omaha has over other reverse mortgage companies is that their HomeSafe reverse mortgage product allows qualifying homeowners to borrow up to $4,000,000 which is significantly higher than the HECM limit.
For those ready to learn more you can visit the website or app where you will have access to further information, including a free reverse mortgage loan guide. When you are ready to apply you can do so easily online or even via the app.
Mutual of Omaha reverse mortgage products are available across the U.S. in all states except for New York and West Virginia.
Another lender we considered
Liberty Reverse Mortgage
Quick Facts
Loan limit: Not listed
Available in all states: Yes
Liberty Reverse Mortgage has been around since 2004 and is considered to be one of the most experienced reverse mortgage companies when it comes to HECM. Since its inception, the company has helped more than 50,000 senior homeowners with reverse mortgages. Liberty Reverse Mortgage is licensed in all 50 states and is rated an A+ accredited business by the Better Business Bureau.
Liberty Reverse Mortgage offers two reverse mortgage products. The first is the standard HECM. The second is HECM for purchase. Fees and costs will depend on the state in which you reside. The fees include FHA Mortgage insurance, origination fees, and appraisal fees. That being said, they are quite competitive when it comes to costs and working directly with Liberty Reverse Mortgage means you can benefit from the Liberty Iron Clad Guarantee, which will match or beat a competitor’s offer.
One thing to be aware of is that Liberty Reverse Mortgage has very strict eligibility requirements compared to other reverse mortgage lenders. In order to qualify you will require a minimum credit score of 620. To compare, most other reverse mortgage lenders have no credit score requirement.
Despite some good features, Liberty failed to make the list due to a history of alleged violations of regulations. One such allegation includes a charge by the state of Minnesota for using an unlicensed loan processor to provide funds.
Expert Takes on reverse mortgages
| Expert | Overview |
|---|---|
| Suze Orman |
Orman warns retirees about the risks of reverse mortgages, advising extreme caution and viewing them as a last resort due to potential financial harm.
|
| Dave Ramsey | Ramsey warns of high fees, interest rates, and predatory lenders. He says paying off your home and saving money is a better path. |
| Clark Howard | Howard cautions seniors about aggressive marketing and advises considering reverse mortgages as a last option after exhausting all other income sources. |
Suze Orman on reverse mortgages
Suze Orman sees tapping home equity as a last resort option, not a first choice. Within her list of biggest money no-nos, she advises against taking out a reverse mortgage in your 60s;
"If you tap all your home equity through a reverse at 62 and then at 72 you realize you can’t really afford the home, you will have to sell the home,
In a recent podcast episode, Orman reinforced this perspective, stating bluntly, "I've never been a fan of reverse mortgages, and I'm never going to." She argues that the goal should be owning your home outright by retirement, not taking on new debt.
Orman advocates finding other income sources first, saying, "Just live your life the way you're meant to live it, own your home outright. Live on the income that you have from other sources. Do not use your home as a checking account."
She also notes reverse mortgages reduce the equity heirs would receive. In summary, Orman firmly believes retirees should see reverse mortgages as an absolute last option and stresses the many downsides and risks associated with them.
Dave Ramsey on reverse mortgages
Dave Ramsey views all debt as fundamentally bad, and reverse mortgages are no exception. An article published by Ramsey Solutions emphasizes they are “loaded with extra costs.” The same article warns borrowers to watch out for predatory lenders,
“The reverse mortgage industry has had problems with scams and fraud over the years and, if you’re not careful, you’ll wind up as the latest victim.”
In a Youtube video he states that reverse mortgages are “not how you become wealthy” and to “make sure you get the house paid off and then save up some money.”
Clark Howard on reverse mortgages
Clark Howard cautions that reverse mortgages are often marketed aggressively to seniors through TV commercials with popular older actors. However, in a blog post he warns, "You have to be so very careful… let me tell you, there are a lot of snakes in the grass."
Aligning with Orman, Howard sees reverse mortgages as a "last resort" option in retirement planning, only to be considered after exhausting all other income sources. In a Youtube video, he states,
"If you're short of cash in retirement, a reverse mortgage may be an option for you - but it's a last option. The time to use it is when you've come up with every other way to pay for monthly expenses and you're still short of money."
He cautions borrowers that "the fees with a reverse mortgage setting it up are gigantic." Howard advises retirees to "shop, shop, shop. Because not all lenders are created equal, and the fees vary tremendously from one lender to another."
What is a reverse mortgage?
A reverse mortgage is a financial product that is available to individuals aged 62 or above who have high equity in their own but find themselves in need of some cash. Instead of taking out a personal loan or using credit cards, you can take out a reverse mortgage to gain access to cash for whatever you need, such as living expenses, medical bills, or even paying off the remainder of your mortgage. While reverse mortgages can be very handy, they do also come with quite a bit of risk.
More: Guide to getting a reverse mortgage
Types of reverse mortgages
When you’re considering a reverse mortgage, there are a few products that you should be aware of.
Home Equity Conversion Loans (HECM): These loans are insured by the Federal Housing Administration (FHA). For 2023, the loan limit is $1,089,300.
Proprietary reverse mortgages: These loans are offered through individual lenders, and are not insured by the federal government. Generally these loans are available if you have a higher value home. You may be eligible for a loan of up to $4 million.
Single-purpose reverse mortgages: Your state or local government may offer single-purpose reverse mortgages. You must specify the purpose of the loan, and only use it for that. These loans are not federally insured.
Reverse mortgage
Pros
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Can help you stay in your home longer
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If you are cash poor but home-wealthy, then a reverse mortgage can help secure your retirement
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Reverse mortgages can be used to pay off your existing home loan
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Funds from reverse mortgages are not taxed as it is considered to be a loan advance rather than income
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Protection is in place should the value of the home end up lower than the total amount owed on the reverse mortgage
Cons
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The home needs to be your principal residence for the majority of the year so you can’t live somewhere else
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Reverse mortgages are costly. There are a number of expenses associated with a reverse mortgage, including an upfront insurance premium and origination fees.
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If you default on your reverse mortgage, you could lose your home
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Having a reverse mortgage could impact your retirement benefits
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Reverse mortgages are not a good idea if you want a heir to inherit the home
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Overall can be a very risky product
Choosing the best reverse mortgage company
Shopping for a reverse mortgage can be intimidating, but here are a few tips and things to keep in mind to better help you choose the best reverse mortgage company.
Credentials: Getting a reverse mortgage is a big deal that comes with a number of fees and some risks. If you are doing it, you want to make sure you do it right. When shopping around for a reverse mortgage lender look at the company's professional credentials. You want a lender that is FHA and HUD approved. It’s also a good idea to work with a reverse mortgage lender who is an active member of the National Reverse Mortgage Lenders Association (NRMLA).
Reviews: While credentials are important, so are good reviews. Yes, you want someone with professional knowledge, but you also want someone who prioritizes your needs and interests. So, take the time to read reviews or even get feedback by word of mouth. If you are looking online, stick to third-party sites that don’t accept sponsored reviews. Websites such as Yelp, Google, Trustpilot and the Better Business Bureau are good resources for honest feedback.
Interest rates and fees: A reverse mortgage is not free and comes with a number of various fees on top of interest, such as origination fees and closing costs. The goal here is to get access to more money, not to spend a lot. So you will want to shop around and compare the interest rates and fees charged by various lenders to find the best fit for you. Make sure you are aware of all upfront costs before committing.
Reverse mortgage fees
Like all loans, the costs associated with a reverse mortgage are dependent on the type of loan you get and the lender you choose.
Be aware that with a reverse mortgage, the principal amount you owe will grow over time.
No matter what type of reverse mortgage you take out, you can expect some standard fees.
Reverse mortgage counseling: Before getting a Home Equity Conversion Mortgage (HECM) reverse mortgage loan, you must receive counseling from an HUD-approved agent. The agent will make a determination of your ability to pay back a loan based on a number of criteria. You may be charged a fee of around $125, but this might be waived.
Loan origination fee: These fees are paid to the lender, and are capped at $6,000. For the first $200,000 of home’s appraised value, a fee of $2,500 or 2%, whichever is higher, will be charged. For the amount above $200,000, you will be charged an additional 1%.
Initial mortgage insurance premium (MIP): You will be charged both an initial and annual mortgage insurance premium by your lender. These fees go to the FHA, and guarantee that you get your loan advance. This fee is 2% of $1,089,300, which is the maximum lending limit for a reverse mortgage for a HECM. Alternatively, the fee can be 2% of the property’s value at the time of closing, whichever is less.
Closing costs: These fees vary depending on the third-party you are using. These costs include things like the appraisal fee, title search, credit checks, state mortgage taxes and additional fees. These fees are also dependent on the value of the home, its location, and other such factors. It is possible to have closing costs rolled into your reverse mortgage amount.
Best reverse mortgage FAQs
Methodology: How we chose the best reverse mortgage companies
Product rankings are determined by the Moneywise editorial team and are based on factors and features that everyday users care about most. We adhere to strict standards of editorial integrity to help you make decisions with confidence. The products and companies featured in this article were independently selected, but please be aware that some products and services linked in this article are from our sponsors.
Moneywise rates products and services on a sale of 1 to 5 stars, where 5 stars is the best rating possible. Ratings are rounded up to the nearest 0.5 of a star.
Our rating system is based on the factors that mean the most to the everyday user. These factors include:
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We collect data from providers' websites, by using the services and watching demonstrations as required. The data is analyzed and the result is a star rating. Each factor is weighted depending on the category in which the product is being evaluated, in order to ensure it meets the needs of different users.
Our goal is to provide an independent review, and give you the information you need to make a decision on which service is best for you.
Hannah Logan is an Ottawa-based writer and blogger who specializes in personal finance and travel.
Daniel is an expert on travel, finance, and SEO. He received an Honours BBA (Finance) from Wilfrid Laurier University, then started his career with WOWA. Here, he learned various SEO tactics that were instrumental in quadrupling monthly traffic to one million views. Now the founder of Croton Content, Daniel helps financial companies scale through evergreen content. Aside from Money Wise, notable clients include Forbes Advisor, WealthRocket, and Hardbacon. Daniel loves to travel when not working. Although based out of Lisbon, Portugal, some of his most adventurous destinations include Rio, Cairo, and Istanbul.
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