Best Reverse Mortgage Companies

If you’re 62 or older and own your home, a reverse mortgage can help convert some of your equity to cash. Reverse mortgages don’t require you to make monthly payments as long as you live in the home. You might consider this option if you’d like to create an additional income stream in retirement. 

We’ve compiled a list of companies that stood out in our research and reviewed them below.

Best reverse mortgage companies

These companies offer superior services, diverse loans, and top-tier customer service. The table below shows which products each company offers. All five provide a Federal Housing Administration (FHA)-insured home equity conversion mortgage (HECM) and other options.

You can click the lender’s name in the table to jump down to our review and learn why we think it’s one of the best.

Lender	Best for
Longbridge Financial	Customer reviews
Finance of America	Flexible options
Fairway Independent Mortgage Company	Fast closing

Longbridge Financial – Best for customer reviews

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• Individualized approach to service
• Competitive rates
• Wide variety of loans

Longbridge Financial provides personalized service, ensuring each client’s needs are met. Competitive rates on its wide array of loan products are further evidence of its commitment to making reverse mortgages affordable and accessible to seniors. 

By focusing on individual client needs, Longbridge assures a tailored experience for all its customers and provides exceptional service quality.

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Finance of America – Best for flexible options

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• Wide selection of reverse mortgage options
• Practical online tools
• Positive customer reviews

Finance of America Reverse offers a broad product range with tailored options for different consumer needs and circumstances. It sports convenient online tools, simplifying the application process for the busy 21st-century homeowner.

Positive consumer testimonials point to a company that prioritizes customer satisfaction and quality service to build trustworthy relationships with its clients.

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Fairway Independent Mortgage Company – Best for fast closing

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• Fast application-to-closing times
• Diverse mortgage products
• Excellent customer service

Fairway Independent Mortgage Corporation makes the grade for its speedy closing times. A fast process helps applicants close on their reverse mortgages faster than average.

Fairway offers an array of diverse reverse mortgage products to suit various borrower requirements. Furthermore, its stellar customer service practice contributes to a smooth, positive experience for clients.

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How does a reverse mortgage work? 

A reverse mortgage allows homeowners to leverage their equity for cash, similar to a home equity loan or home equity line of credit (HELOC). 

But these are the important differences: 

• Reverse mortgages typically require the homeowner to have little to no mortgage debt. 
• Homeowners can withdraw some of their equity in cash without making monthly payments. 
• Interest and fees accumulate while the reverse mortgage balance is outstanding. 
• Repayment of the outstanding balance is due when the homeowner sells the home or continues to own it, but it’s no longer their primary residence. 

The homeowner must keep up with property taxes and pay for homeowner insurance. They must also handle regular maintenance on the property to keep it in good condition. 

Who repays a reverse mortgage? 

Repayment can depend on the situation. 

Situation	Repayment
Homeowner sells home	Homeowner pays from the sale proceeds
Homeowner permanently moves into nursing facility (still owns home)	Homeowner pays balance in full (unless spouse remains in home and is a co-borrower on the reverse mortgage)
Homeowner passes away	Heirs pay the balance

Our expert advises: Common misconceptions

Erin Kinkade

CFP®

Fees are associated with a reverse mortgage even though the borrower doesn’t need to make a monthly mortgage payment. Also, the remaining mortgage balance is not forgiven at the death of the borrower or the second to die. The mortgage must be repaid by selling the home or a lump-sum payment. If the housing market takes a dip and the value of the home is lower than the outstanding mortgage, the surviving heirs may need to pay the difference. We recommend consulting with a financial professional who is well-versed in the considerations of reverse mortgages before you move forward. I also recommend bringing the family members and other heirs who could be affected into the discussion so they understand—although they don’t need to be the ones making the final decision.

Types of reverse mortgages 

Homeowners seeking a reverse mortgage have options. One type of reverse mortgage may better suit your needs than another, depending on your reasons for tapping into your equity and financial situation.

Home Equity Conversion Mortgage (HECM)

• What it is: The standard of reverse mortgages. It is insured by the Federal Housing Administration (FHA).
• Uses: Homeowners who own their homes outright or have a low mortgage balance and sufficient financial resources for insurance, taxes, and maintenance.

HECM for Purchase

• What it is: This program allows buyers to combine a reverse mortgage with the purchase of a new home.
• Uses: Those planning to buy a home and who have sufficient cash to meet the down payment requirement

Jumbo Reverse Mortgage

• What it is: Known as proprietary reverse mortgages, these are tailored for homes with higher values that exceed federal loan limits.
• Uses: Homeowners with high-value homes who want access to large cash amounts.

Single-Purpose Reverse Mortgage

• What it is: The most narrowly focused option, single-purpose reverse mortgages are typically offered by state and local government agencies.
• Uses: These loans are restricted to a single purpose, like home repairs or property taxes, making them a cost-effective solution for specific financial needs.

How to choose the best reverse mortgage for you 

Finding the best reverse mortgage option starts with evaluating what you need and which type of reverse mortgage you’re most likely to qualify for. Consider the following questions. 

• How much of my equity will I be able to withdraw in cash? 
• Do I own a high-value home? 
• What eligibility requirements must I meet? 
• What interest rate range do I want? 
• How can I access my equity?
• What will I use the proceeds for? 
• Will I need to pay any fees out of pocket at closing? 

If you’re married, you’ll need to decide whether to list your spouse as a co-borrower. The advantage is they would be able to stay in the home if you pass away or move out without having to repay the reverse mortgage. Co-borrowers must be 62, so if your spouse is younger, they may not be eligible. 

The amount you can withdraw depends on your age, your home’s value, and the interest rate. In 2024, the maximum HECM limit is $1,149,825, but your actual reverse mortgage amount may be much lower. 

Reverse mortgages may have fixed or variable rates, depending on your payout option. You can get payouts via:

• A lump sum (fixed rate)
• A revolving line of credit (variable rate)
• Monthly or annuitized payments (variable rate)

Some lenders may offer the option to combine a revolving credit line with monthly or annuitized payments. Looking at all of the above when comparing reverse mortgage companies can help you narrow down the options to find one that’s best suited to your needs. 

Read More

Reverse mortages in Texas

Our expert’s advice: How to manage the proceeds from a reverse mortgage

Erin Kinkade

CFP®

I recommend engaging a financial professional or trusted individual to work with you to create a budget and financial plan. Identify the specific purposes for the proceeds, and follow the plan so you don’t use the funds for other unnecessary or frivolous purposes.

How to get a reverse mortgage 

If you’re ready to take out a reverse mortgage, you’ll need to take several steps. Here’s what to expect once you’ve chosen a reverse mortgage company. 

1. Meet with a reverse mortgage counselor. Federal guidelines require homeowners interested in a reverse mortgage to meet with a Department of Housing and Urban Development (HUD)-approved counselor before applying. This is to ensure you fully understand what you’re agreeing to with a reverse mortgage. 
2. Complete the application. Once you complete counseling, you can apply for a reverse mortgage. You must provide a counseling completion certificate, copies of your most recent mortgage statement if you still owe a balance, a copy of your deed or title if you own the home, property tax bills, a copy of your homeowners insurance policy, bank account statements, and proof of income if you’re still working. 
3. Get an appraisal. The reverse mortgage company needs to know what your home is worth to decide how much of your equity you can withdraw. It should schedule a professional appraisal through an independent agency. You’ll pay the appraisal fee, which can cost several hundred dollars. 
4. Close the reverse mortgage. If you’re approved, the final steps are closing and disbursement. You’ll need to sign the required paperwork and tell the reverse mortgage company where to send the proceeds if you choose a lump sum payout. 

Most reverse mortgages don’t rely on credit scores for approval, but the reverse mortgage company will likely perform a hard check of your credit to ensure you have no federal tax liens or delinquent debts. You must consent to the credit check when you submit your application. 

From start to finish, the reverse mortgage process typically takes 30 to 45 days. It may take longer if you hit a snag in underwriting or there’s a delay in completing the appraisal. 

FAQ

How do you repay a reverse mortgage?

Repayment on a reverse mortgage is required after the homeowner passes away, sells the property, or moves out permanently. When the loan becomes due, the homeowner or their estate can sell the home and use the sales proceeds to repay the reverse mortgage. The remaining equity is distributed to the homeowner or their heirs. The heirs may also keep the home and repay the reverse mortgage out of pocket.

What are the costs of a reverse mortgage?

The typical costs are:

• Origination fees: Lenders charge an origination fee to process the reverse mortgage. This fee can vary by lender and the amount of the loan.
• Mortgage Insurance Premiums (MIP): For an FHA-insured HECM, an upfront MIP and annual MIP charge apply. The upfront MIP is based on the home’s value or the FHA lending limit, whichever is less, and the annual MIP accrues over time and is added to the loan balance.
• Appraisal fees: An appraisal is required to determine the home’s value, and the borrower pays for it.
• Closing costs: These include charges for services necessary to close the loan, such as title search, title insurance, surveys, inspections, recording fees, and credit checks.
• Servicing fees: Some lenders charge monthly servicing fees to manage the loan over its lifetime.
• Interest: Reverse mortgages accrue interest over time, which adds to the loan balance. Interest rates can be fixed or variable, depending on the loan terms.

It’s important to review and understand all potential costs before proceeding with a reverse mortgage because they influence how much money is available from the loan and the total cost of the loan over time.

What are the risks of a reverse mortgage?

A reverse mortgage can be a useful tool for seniors needing additional income, but it comes with risks. These include the potential for high fees, the possibility of outliving the loan income, and the risk of foreclosure if homeowners fail to meet their loan obligations, such as paying property taxes or homeowners insurance.