Best Reverse Mortgage Lenders

We started with the companies listed on this guide and narrowed them down by first eliminating those without any verified reviews on our site. Companies then had to have an overall satisfaction rating of at least 4 stars to stay on the list, which only left four brands in the running. Finally, we required our top picks to have at least a 2:1 ratio of 5-star to 1-star reviews.

Once we made our selections, we analyzed verified review data collected between March 29, 2020, and March 29, 2021, to determine what customers consistently like most about our top-rated lenders.

At the time of publishing, American Advisors Group has an overall satisfaction rating of 4.7 stars based on customer experiences over the last year.

A HECM reverse mortgage from American Advisors Group could be good for someone in retirement who needs extra cash flow to supplement their regular income or cover unplanned life expenses. You may have the option to roll upfront costs and fees into the principal, which is due with the rest of the loan.

Available products: American Advisors Group offers a variety of reverse mortgage loan products and services, including standard HECMs, HECMs for Purchase, single-purpose reverse mortgages, proprietary reverse mortgages and refinancing loans.

What to consider: AAG is licensed to provide reverse mortgages in almost every state. However, it currently only has physical branch locations in California, Georgia, Hawaii, Illinois, New York and Texas.

What we like: Each new client is assigned a dedicated loan officer who helps them through the entire process, from scheduling an appraisal to submitting their application for underwriting review. According to positive reviews, loan officers are very good at making clients feel comfortable. They take the time to answer all questions to make sure everything is clear. All of AAG’s reverse mortgage professionals are required to pass federal and state tests to get their licenses through the Nationwide Mortgage Licensing System.

Finance of America Reverse has an overall satisfaction rating of 4.6 stars at the time of publishing, leaving it not far behind AAG. As a wholesale lender, it utilizes independent brokers to work with clients. FAR specializes in proprietary jumbo reverse mortgages through its HomeSafe program.

Through HomeSafe, you can increase your cash flow without paying fees, leverage current equity to purchase a new property or access a credit line. This proprietary reverse mortgage could be good for those with enough equity in a high-value property to leverage more substantial loan amounts than possible with a HECM. Also, FAR’s HomeSafe program doesn’t require you to pay mortgage insurance premiums.

Available products: FAR is a wholesale lender offering HECMs and HECMs for Purchase, second mortgages and loan refinancing. HomeSafe is a program for second-lien reverse mortgages that lets homeowners who already have low fixed rates keep their terms and still tap into their equity. Refinancing is also available through the EquityAvail program.

What to consider: FAR serves homeowners in most states. However, not all HomeSafe products are available nationwide. The HomeSafe program has similar requirements to a government-backed reverse mortgage but with higher loan limits (up to $4 million).

What we like: Those who rated FAR highly often mentioned how the company’s representatives made them feel comfortable through the whole process and answered all their questions. Those who recommend the company to a friend also frequently express satisfaction with their interest rates and terms.

As of publishing, Liberty Reverse Mortgage has an overall satisfaction rating of 4.3 stars. We picked it for refinancing because a relatively high number of 5-star reviews mention good rates and a smooth process.

Available products: Liberty specializes in HECMs and HECM for Purchase loans. Through its new EquityIQ program, the company offers jumbo reverse mortgages up to $4 million.

What to consider: Liberty Reverse is currently unavailable in Hawaii, New York, South Dakota and Utah. According to positive reviews, the application and underwriting process takes between four and six weeks. However, some negative reviews from 2020 seem to have to do with delays related to COVID-19.

What we like: Many who told us they would recommend Liberty to a friend also mentioned the loan officers were “very nice” and “helpful.” People seem to like that the company’s representatives take time to answer all questions throughout the application and underwriting processes.

According to a reviewer who refinanced with the company earlier this year: “Liberty did good. They helped us out a lot. All the people I talked to there were great. Also, the interest rate was a lot better.” Another reviewer with a line of credit said that “it’s a very efficient process working with Liberty.”

With a reverse mortgage, you can get a one-time cash payout or regularly recurring disbursements in exchange for reducing the equity you have in your home. Think of equity as the percentage of your home that you’ve already earned. A reverse mortgage lets you tap into that equity without selling your home.

Most people access about
60% of a home’s value
through a reverse mortgage

There are specific requirements you must meet to qualify for a reverse mortgage. Generally, the amount you can access through a reverse mortgage is determined by the:

• Age of the youngest homeowner
• Current value of your property
• Balance on your current mortgage
• Interest rate

The title of your house stays in your name, and your lender uses the property as collateral against the loan. This means that the lender may force you to sell your house when the loan comes due. However, it’s a nonrecourse loan, so lenders can’t demand more than the home is worth, and your reverse mortgage shouldn’t come due until you die or violate the terms of the loan.

In other words, you can’t owe more than your home is worth when the loan becomes due. Additionally, if the property is sold for more than the debt on the loan, you (or your estate) are entitled to the surplus. For more information, read about what a reverse mortgage is and how it works next.

Types of reverse mortgages

The three main types of reverse mortgage products are home equity conversion mortgages (HECMs), single-purpose reverse mortgages and proprietary reverse mortgages. Which one’s right for you depends on your financial needs and retirement goals.

• Home equity conversion mortgages: A HECM (pronounced “heck-um”) is a reverse mortgage offered through Federal Housing Administration-approved lenders and backed by the Department of Housing and Urban Development (HUD). HECM loans have a 95% market share of the reverse mortgage industry. Unlike a single-purpose reverse mortgage, HECM loan proceeds can be used for whatever purposes the borrower wants, including living expenses or home repairs. However, the FHA capped the maximum HECM lending limit at $822,375 in 2021. This means that you may have to look for another option if your equity exceeds this limit.
• HECM for Purchase loans: A HECM for Purchase loan leverages a borrower’s existing equity to finance a new house, often to downsize, move closer to family, relocate to a property better suited to aging in place or transition into a retirement community. A HECM for Purchase doesn’t require you to make monthly loan payments, but it does require that you keep up with mortgage insurance premiums and property taxes. Perhaps the most significant advantage of a HECM for Purchase is that you have to pay just one set of loan closing costs.
• Single-purpose reverse mortgages: Single-purpose reverse mortgage proceeds can be used for lender-approved purposes, including property taxes or crucial home repairs. Local governments and nonprofits that offer these don’t charge origination fees, and the closing costs are minimal. According to the Federal Trade Commission, single-purpose reverse mortgages are the least expensive reverse mortgage type, but they aren’t available everywhere.
• Proprietary reverse mortgages: Wholesale lenders offer proprietary reverse mortgage loans up to $4 million. Proprietary reverse mortgages aren’t insured by the government, but this also allows them to exceed HECM limits. This is why they are sometimes called jumbo reverse mortgages. Since the federal government does not heavily regulate them, proprietary lenders have different rules regarding nonborrowing spouses by state, and funds might affect some government assistance programs.

Reverse mortgage payout options

Reverse mortgage borrowers can select how frequently they receive their loan proceeds. Depending on the type of reverse mortgage you choose, you can get funds in a lump sum, in fixed monthly installments or through a line of credit. The older the borrower is, the more equity they usually can access, which makes reverse mortgages popular among older retirees.

• Lump-sum payments: Lump-sum payments come all at once in a single disbursement. Lump-sum amounts are most commonly used in HECM for Purchase reverse mortgages.
• Fixed monthly payments: Fixed monthly payments are disbursed regularly. If you opt for fixed monthly payments, you can select from term or tenure payments. Term payments are received over a specific amount of time — typically between five and 10 years. Tenure payments are received as long as the home is your primary residence.
• Lines of credit: A line of credit lets the borrower access funds as needed. The line of credit grows over time, but the borrower doesn’t necessarily earn interest on it.

Reverse mortgage FAQs

Before you can know if a reverse mortgage is right for you, it helps to understand your options and the typical fees involved. Keep in mind that the real cost of your reverse mortgage is a combination of upfront fees and ongoing costs.

HECM lending limits are
$822,375
in 2021

Upfront reverse mortgage fees

The upfront costs associated with a reverse mortgage include fees, charges for services and your initial mortgage insurance premium.

• Counseling fee: Reverse mortgage counseling is mandatory if you choose a government-backed reverse mortgage. It typically costs around $125 to get a certificate from a HUD-approved, third-party HECM counselor. However, if you cannot afford this fee, it may be waived.
• Appraisal fee: Professional home appraisals are required for HECMs. The process is similar to the kind of home inspection you need to sell a property. Average home appraisal costs range from $300 to $500.
• Loan origination fee: Loan origination fees are based on your home’s current value, but the government limits reverse mortgage origination fees to a maximum of $6,000.
• Closing costs: Closing costs include fees for credit checks, document preparation, loan recording, couriers, inspections and title insurance. Reverse mortgage closing costs vary depending on the type of loan and your state of residence. Eligible homeowners have the option to pay closing fees upfront or bundle closing costs.
• Mortgage insurance premium: Initial mortgage insurance premiums (MIP) cost up to 2% of the loan amount and are due at loan closing.

Ongoing reverse mortgage costs

Even though you receive payment after you close on a reverse mortgage, there are still additional costs to consider. Annual mortgage insurance premium payments are typically between 0.5% and 1% of the outstanding mortgage balance. Homeowner’s insurance is also required, and flood insurance may be mandatory in some areas.

Reverse mortgage lenders also charge monthly fees for administering the loan. Servicing fees are a fixed amount capped at less than $40 for HECMs, but they are due each month.

You also must continue to pay property taxes and keep your property in good condition, so plan on paying regular costs for maintenance. Your loan can wind up in default if you violate its terms by neglecting the collateral property or not keeping the property in good condition.

You can also opt in to a life expectancy set-aside (LESA), which dedicates a portion of your reverse mortgage proceeds to pay for future taxes and premiums for a period of time. According to the National Reverse Mortgage Lenders Association (NRMLA), a LESA can fund property taxes, homeowners insurance and flood insurance, but it can’t fund homeowners association dues or condominium fees.

If you’re eligible for a reverse mortgage and decide it’s the right move for you and your family, the next thing to do is find out exactly how much equity you have in your home. An appraisal is required to determine your home’s current fair market value, and you can see how much you owe on your house on your monthly mortgage statement.

After you complete the initial application and submit a signed certificate, you must pay for an independent HUD-approved appraisal. An underwriter then reviews your application and sets a closing date if everything is in order.

If you’re considering a reverse mortgage, here are some key takeaways to keep in mind:

• Put the house in both spouses’ names: In most scenarios, it’s ideal if the people listed on the title also sign for the reverse mortgage. If you’re married, your spouse must consent to the reverse mortgage but is not legally required to sign on as a borrower. However, this can create problems down the road. For instance, the surviving spouse could lose the property if the primary borrower passes away and the loan is due.
• Understand how interest accumulates: With a reverse mortgage, interest payments on the loan are deferred but still accumulate. Just like traditional mortgages, reverse mortgages can have fixed or adjustable interest rates. Adjustable interest rates are sometimes called variable interest rates because they change over time. Furthermore, interest on reverse mortgages is not tax deductible.
• Know when the loan is due: As long as the terms of the reverse mortgage are met, the loan has to be repaid only when the borrower dies or permanently moves from the residence. Reverse mortgages are nonrecourse loans, meaning the lender can seize the collateral if the borrower defaults. However, the borrower (or heir) is not obligated to pay compensation, even if the collateral doesn’t cover the full balance of the debt. Heirs have the option to pay back the reverse mortgage, usually through refinancing. Otherwise, the lender puts a lien on the property to settle the loan.
• Remember you have rights: You have the right to cancel without any penalties within three business days after your reverse mortgage closing date — this is known as the rescission period. The Truth in Lending Act (TILA) requires lenders to provide a Good Faith Estimate (GFE) that itemizes all reverse mortgage service fees. Lenders must disclose your total annual loan cost (TALC), which is similar to how standard mortgage lenders must disclose the annual percentage rate (APR).

We compared our favorite reverse mortgage companies across the U.S. to help you find the right one for you.

• Bakersfield
• Baltimore
• Boise
• Buffalo
• Cincinnati
• Cleveland
• Denver
• Detroit
• Fort Myers
• Green Bay
• Indianapolis
• Kansas City
• Lansing
• Las Vegas
• Milwaukee
• Nashville
• Omaha
• Phoenix
• San Diego
• Tallahassee
• Tampa
• Tucson
• Waco
• West Palm Beach