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Reverse Mortgages

Best Reverse Mortgage Lenders

by Michele Lerner Mortgage & Real Estate Contributing Editor

Updated on 02/28/2018

With a reverse mortgage, homeowners receive money from the lender instead of paying money to them—they are the reverse of a traditional mortgage. Reverse mortgages are available to homeowners who are over the age of 62 who live in their home and either own it outright or have a minimal remaining mortgage balance.

Homeowners can choose from several types of reverse mortgages. To ensure they receive the best value for their home, homeowners should thoroughly research all of their options and speak to a financial advisor before signing any paperwork.

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Compare Reviews for Top Reverse Mortgage Lenders Sort Most Popular Most Reviewed Best Rated
Finance of America Reverse	Read 1536 Reviews	Finance of America Reverse provides homeowners age 62 and older with financial independence for retirement through reverse mortgages. Savvy homeowners can leverage their home equity to strengthen and lengthen retirement plans.	Visit Website toll freenumber (855) 463-5773
Liberty Home Equity Solutions, Inc.	Read 1033 Reviews	Liberty Home Equity Solutions, Inc. offers reverse mortgages to homeowners aged 62 and older to achieve short-term financial goals and as a long-term retirement planning solution.	Visit Website toll freenumber (855) 464-8749
American Advisors Group (AAG)	Read 636 Reviews	The American Advisors Group (AAG) offers reverse mortgage loans that are backed by federal insurance. Thousands of seniors have used this financial tool and interested applicants can opt to receive a free information kit.	Visit Website toll freenumber (855) 465-1706
Live Well Financial	Read 428 Reviews	Live Well Financial walks you through the reverse mortgage process, including who is eligible and what to expect after the mortgage is approved. Traditional mortgages and online calculators to compare options are also available.
InterContinental Capital Group	Read 120 Reviews	Intercontinental Capital Group offers reverse mortgages, FHA loans, mortgage refinancing and conventional mortgages. The company focuses on providing good customer service with mortgage specialists and its Electronic Loan Center.	Visit Website toll freenumber (844) 486-2173
Champion Mortgage	Read 45 Reviews	Champion Mortgage makes it easy to get answers about obtaining and living with a reverse mortgage. You can call the toll-free number to talk to a representative, and information is also available in their website's FAQ section.
One Reverse Mortgage	Read 16 Reviews	Specializing in reverse mortgages, One Reverse Mortgage leads borrowers through each step of the process. This and their licensed specialists make it an easy option for those new to the concept of reverse mortgages.
All Reverse Mortgage Company	Read 6 Reviews	All Reverse Mortgage Company only does reverse mortgages, meaning the representatives are focused on and knowledgeable about them. Its commitment to customer care make it a stand-out in the reverse mortgage industry.
Financial Freedom Senior Funding	Read 11 Reviews	Out of Business Financial Freedom Senior Funding is not currently accepting new customers. It provides a convenient online login so existing customers can easily access their loan information at any time.

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What facts should you know about reverse mortgages?

Debt limits

The debt limit is the total amount of debt the borrower incurs. It includes all loan amounts, interest payments and financing fees.

Based on home equity: The total amount the debtor borrows is based on his or her equity in the home.
You keep surplus: If the debt limit is less than the total value of the home at the time the borrower pays it off, the borrower gets to keep the surplus.
Cap based on home value: The lender cannot demand more from a borrower in repayments than the home is worth.

Home ownership

In most cases, the debtor must own the home outright in order to take out a reverse mortgage, although some reverse mortgages make an exception.

Pay off old mortgage: If the homeowner has only a few mortgage payments left, the reverse mortgage must be used to pay it off before any cash disbursement.
Cash payment based on home equity: The homeowner receives cash payments based on his or her equity in the home and age.
Responsibility doesn’t transfer: The debtor remains the homeowner of record and is therefore responsible for home insurance premiums, property taxes and maintenance costs.

Financing fees

The reverse mortgage lender charges financing fees based on the borrower’s home equity and costs of providing the loan. Borrowers can wrap most of these fees into the balance of the reverse mortgage.

Lender fees: Lenders charge a fee for originating and servicing the loan that can be paid upfront or when the loan enters repayment.
Mortgage insurance premiums: Borrowers must pay for mortgage insurance throughout the life of the loan to make sure the lender gets repaid if the borrower defaults on the loan.
Interest rates: Lenders charge interest each month based on the amount of money the borrower owes.

Repayment requirements

Reverse mortgages become payable at the end of the life of the loan. Borrowers, or their heirs, may be liable for the full payment once the loan ends. They have the option of selling the house and turning over proceeds to the reverse mortgage lender or repaying the loan with other funds if they want to keep the house.

Payments begin when the borrower moves out: If the borrower moves out of the home, the reverse mortgage becomes due.
Payments begin after the borrower’s death: If the borrower dies while still owning the home, his or her estate is liable for the cost of repayment.
Acceleration: Under certain conditions, such as the borrower renting out part of the home, the loan can become repayable while the borrower is still living in it.

Right of cancellation

Borrowers have limited rights to cancel a reverse mortgage once they enter it.

Three business days: In most cases, borrowers have three business days to cancel a loan; many lenders count Saturday as one of these three days.
Done in writing: Borrowers must write a letter requesting the loan be cancelled.
Lender provided form: Most lenders provide a form borrowers can fill out within the three day period to cancel the loan.

Loan amounts

The loan amount is the amount of money the borrower actually receives when he or she takes out a reverse mortgage. The amount that can be borrowed depends on your age, the appraised value of the home and loan limits in the area. It differs from the debt limit, which includes interest payments.

Lump sum payment: The borrower receives one check with the entire loan payment.
Short term recurring loan: The borrower receives a monthly check for a specified period of time.
Long term recurring loan: The borrower receives a monthly check until he or she moves out of the house or passes away, whichever comes first.

What are different types of reverse mortgages?

Home Equity Conversion Mortgage (HECM)

Home equity conversion mortgages, or HECM’s, are the only type of reverse mortgage that is insured by the federal government. The insurance premiums are paid by the borrower but protect the lender in case the home’s value is insufficient to repay the full mortgage when the loan becomes due. This type of loan gives borrowers the largest amount of money; upper limits are based on the borrower’s age and the amount of equity he or she has in the home. Borrowers can use the money for any purpose they wish.

Deferred Payment Loan (DPL)

Many state and local governments offer deferred payment loans, or DPL’s. These loans are provided for the purpose of completing specific home repairs. DPL’s can be difficult to find and apply for.

Property Tax Deferral (PTD)

Property tax deferrals are state-provided loans that are used to pay property taxes owed. The borrower takes the loan out against the value of his or her home. These loans may require borrowers to have less than a certain amount of income and to be over the age of 65.

Proprietary Reverse Mortgages

Private companies sometimes offer proprietary reverse mortgages. These mortgages may provide a larger payout than HECM’s, however, they may be more expensive. These mortgages are not insured by any government agency and are financed only through lenders approved by private developers.

Who should consider reverse mortgages?

Senior citizens on fixed income

People over the age of 62 who own their own home qualify for reverse mortgages. Many seniors who depend on a fixed income from Social Security or other retirement programs use reverse mortgages to supplement their income.

Seniors who want to enjoy their later years

The older the borrower is when he or she takes out the reverse mortgage, the more loan proceeds he or she is entitled to. People over the age of 75 tend to get much higher loan payments, and many use the money to finance new experiences during their later years.

Seniors who expect their house’s value to rise

When a borrower moves out of the house or dies, the loan becomes due – but the borrower or his or her heirs gets to keep any surplus from the sale of the house. So if a senior expects the house to rise in value, he or she might take out a reverse mortgage and plan for heirs to receive the surplus once the loan is paid off.

Expert reviews for reverse mortgages

Finance of America Reverse has been servicing mortgages and reverse mortgages since 2003. It consistently gets high scores on customer satisfaction surveys.

Formerly known as Genworth Financial Home Equity Access, Inc., Liberty Home Equity Solutions, Inc. has been helping senior citizens gain financial independence and security through Home Equity Conversion Mortgages (HECMs) for almost a decade. They are a direct lender and are licensed in all 50 states. Liberty currently does not offer consumer-direct retail lending in Utah, but they do in every other state.

Live Well Financial has been offering reverse mortgages and other mortgage products since 2005. It originally only served customers in Virginia, but now services mortgages and reverse mortgages across America.

Intercontinental Capital Group, Inc. is a mortgage lender specializing in loans for single-family homes and multi-family homes with up to four residences. The company offers reverse mortgages as well as FHA loans, conventional mortgages and mortgage refinancing. It has been in business since 2005 and is headquartered in Jericho, New York.

Financial Freedom is a Texas-based mortgage specialist that services reverse mortgages across the United States. Currently, the company is not accepting new clients, but existing customers can continue to access their account online.

American Advisors Group has been in business for approximately 10 years. Its mission is to help seniors convert as much home equity into tax free cash as possible.

Champion Mortgage has been providing seniors and others with a variety of mortgage products since 1997.

All Reverse Mortgage Company is a family-owned mortgage business whose team members have 100 years of mortgage experience when their individual experiences are combined.

NewDay USA is a mortgage team that is mostly comprised of veterans. It is dedicated to providing veterans with maximum benefits, including special mortgage or reverse mortgage terms.

One Reverse Mortgage is the largest reverse mortgage lender in America. It is best known for using actor Henry Winkler in its infomercials.

Disclaimer

Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.

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Michele Lerner Mortgage & Real Estate Contributing Editor

Michele Lerner, author of “HOMEBUYING: Tough Times, First Time, Any Time”, has been writing about personal finance and real estate for more than two decades. Michele writes for regional, national and international publications in print and online for a variety of audiences including consumers, real estate investors, business owners and real estate professionals.