Many or all companies we feature compensate us. Compensation and editorial research influence how products appear on a page. Mortgages Open Mortgage Reverse Mortgage Review Updated Mar 19, 2024 9-min read Reviewed by Cassidy Horton Reviewed by Cassidy Horton Expertise: Banking, insurance, home loans Cassidy Horton is a finance writer passionate about helping people find financial freedom. With an MBA and a bachelor's in public relations, her work has been published more than a thousand times online. Learn more about Cassidy Horton Learn more Our take on Open Mortgage’s reverse mortgage Best for those wanting a HECM or HECM for purchaseStands out for personalized serviceStreamlined application About Open Mortgage reverse mortgage Open Mortgage was founded in 2003 in Austin, Texas. Today, it holds mortgage licenses in 45 states plus Washington, D.C., and has 20 reverse mortgage offices in nine states. In 2023, Open Mortgage was the sixth largest HECM lender in the U.S., with 2.5% of the market share. As a full-service mortgage lender, the company’s mission is to help families fulfill their dreams of homeownership. It offers several loan programs, including reverse mortgages, refinancing, and conventional, FHA, USDA, VA, DPA, and rehab loans. Open Mortgage is best if you’re age 62 or older and want to access your home equity via a Home Equity Conversion Mortgage (HECM) or HECM for purchase. It’s also a good fit if you prefer a company that offers personalized service and modern technology. Table of Contents Skip to Section Open Mortgage reverse mortgage at a glanceWho’s eligible for an Open Mortgage reverse mortgage?Pros and cons of an Open Mortgage reverse mortgageMore about Open Mortgage Open Mortgage reverse mortgage at a glance We’ll dive into more details below—but first, here’s a brief overview of Open Mortgage reverse mortgages. TermDetailsLoan typesFixed-rate HECM, adjustable-rate HECM, HECM for purchaseLoan amountsUp to $1,149,825FeesOrigination fee, closing costs, mortgage insurance premiumsPayment optionsTerm, tenure, line of credit, lump sum, modified term, modified line of credit, modified tenureUnique featuresNo servicing fees How does an Open Mortgage reverse mortgage work? If you’re 62 or older, you can use an Open Mortgage reverse mortgage to convert part of your home equity into cash without having to sell your home or take on monthly mortgage payments. Open Mortgage offers two types of reverse mortgages: standard HECMs used for retirement and HECMs for purchasing a new home. The amount you can borrow with a reverse mortgage is based on your and your spouse’s age, the current interest rates, and the appraised value of your home. The older you are, the more you can borrow. Your home equity—the part of your home’s value that you own free and clear—is the basis for calculating the loan amount. For 2024, you can borrow up to $1,149,825, the limit set by the Federal Housing Authority (FHA). Costs and fees With a reverse mortgage, you’ll encounter several costs, like an origination fee, closing costs, and ongoing mortgage insurance premiums. Most of these fees can be financed with the reverse mortgage, meaning they’re added to the loan balance and paid off when it becomes due. Interest Interest on an Open Mortgage reverse mortgage accrues over the life of the loan. Since you’re not making monthly payments, the interest compounds, causing the loan balance to grow over time. The interest rate can be fixed or variable, depending on the loan option you choose. HECMs for purchase (H4P) Unlike a standard HECM—used to access equity in your current home—a HECM for purchase allows you to buy a new primary residence. You’ll use the loan proceeds to pay for part of the home’s cost, which can be a great way to relocate or downsize while preserving some of your savings. As with any reverse mortgage, you don’t have to repay the loan until you sell your home, move out, or the last borrower passes away. At that point, the home can be sold to repay the loan, or your heirs can choose to pay off the loan and keep the home. Who’s eligible for an Open Mortgage reverse mortgage? You’re usually eligible for an Open Mortgage reverse mortgage if you meet these requirements: At least 62 years oldLive in the home as your primary residenceHave enough income to cover property taxes, home insurance, routine maintenance, and HOA fees Like all reverse mortgages, there are no minimum credit score or debt-to-income ratio requirements. Instead, you must complete a HUD counseling session to ensure you understand the consequences of taking out a reverse mortgage. RequirementDetailsEligible propertiesPrimary residenceAge of applicant62+Eligible statesEverywhere except Alaska, Indiana, Maine, Massachusetts, New York, Ohio, South Carolina, and VermontMaximum loan-to-valueMust have at least 50% equity in homeMaximum debt-to-incomeNoneMinimum credit scoreNone How do you repay a reverse mortgage from Open Mortgage? You repay your reverse mortgage when you sell your home, permanently move out, or when the last borrower dies. You’re considered “permanently moved out” if you haven’t lived at home for at least one year. This is something to remember if you transfer to an assisted living facility. You usually settle the loan with the proceeds from selling your house. If the sale doesn’t cover the full amount, mortgage insurance kicks in to cover the shortfall. This “non-recourse” feature ensures you never owe more than the home is worth—even if the loan balance exceeds the property value. If you wish to keep the home, you or your heirs can opt to refinance the reverse mortgage or pay off the debt using other funds. Pros and cons of an Open Mortgage reverse mortgage Pros Good industry standing As the sixth largest HECM lender in the U.S., Open Mortgage brings a wealth of experience and a solid track record to the reverse mortgage space. Modern application process Open Mortgage is known for offering online resources that make applying for a reverse mortgage more convenient and accessible. Branch locations You can apply with Open Mortgage online or by visiting a reverse mortgage loan office in these nine states: Arizona, Florida, Georgia, Kansas, Mississippi, Missouri, Nevada, Oklahoma, and Texas. Cons Not available in some states Open Mortgage isn’t licensed to do business in Alaska, Indiana, Maine, Massachusetts, New York, Ohio, South Carolina and Vermont. Few online customer reviews Compared to other mortgage lenders, Open Mortgage has very few customer reviews online. No jumbo reverse mortgages If your borrowing limit exceeds the federal limit for HECMs, Open Mortgage won’t be able to serve your needs as it doesn’t offer jumbo reverse mortgages. Consider top reverse mortgage lenders like Reverse Mortgage Funding and American Advisors Group (AAG) if you need a jumbo reverse mortgage or live in states where Open Mortgage isn’t available. Is Open Mortgage a reputable lender? SourceCustomer ratingNumber of reviewsGoogle4.4/57Better Business Bureau2.89/59Zillow4.91/523Collected on March 3, 2024. Open Mortgage isn’t on Trustpilot, and it only has a handful of reviews on sites like Google, Better Business Bureau (BBB) and Zillow. Of the few reviews we’ve found, customers mention great rates and quick closing times. The biggest complaint was about unprofessional service at local branch locations and a lack of communication. Open Mortgage has an A+ rating with the BBB, but it isn’t BBB accredited. How to apply for an Open Mortgage reverse mortgage Applying for an Open Mortgage reverse mortgage is designed to be as thorough as possible upfront to save time later. You’ll typically follow the steps below. If you run into issues or have questions, you can call customer service at 888-781-6626. Counseling. Complete a session with a HUD-approved counselor to understand what a reverse mortgage is and how it works.Application. Fill out the application with your personal and property details.Underwriting. Wait for Open Mortgage to review your information, order an appraisal to determine your home’s value, and verify your finances. Provide additional information if needed.Closing. If approved, you’ll sign the final documents to proceed with the loan.Right of rescission. You have three days post-closing to cancel the loan if you have second thoughts. Each step can vary in time, depending on how quickly you provide information and how busy Open Mortgage is. Spouses or anyone else on the home’s title will be involved in the process, and you’ll need to provide documents like proof of income, assets, debts, and your home’s title. If you’re denied, Open Mortgage will explain why, which can range from credit issues to the condition of your home. You can address these issues and reapply, or you may explore other mortgage lenders that may be a better fit. Source: Open Mortgage How do other home equity products compare to an Open Mortgage Reverse Mortgage? If you’re tapping into your home’s equity, you have several options beyond an Open Mortgage reverse mortgage. A home equity line of credit (HELOC) is like a credit card; you’re approved for a certain amount and can draw from it as needed, paying interest only on what you use. It’s flexible but requires monthly payments.A home equity loan is a lump-sum loan with a fixed interest rate, which means you get the money upfront and pay it back with consistent monthly payments. It’s predictable, but there’s less flexibility compared to a HELOC.Cash-out refinancing involves replacing your existing mortgage with a new one for more than you owe. You pocket the difference in cash. This can be a good deal if you can secure a lower interest rate, but it also restarts your mortgage clock. In contrast, an Open Mortgage Reverse Mortgage lets you convert part of your home equity into cash without needing to repay until you sell the home, move out, or pass away. But you must be at least 62, live in the home as your primary residence, and keep up with property-related expenses. Open Mortgage reverse mortgage FAQ How long does it take to get funds from Open Mortgage? Securing a reverse mortgage from Open Mortgage varies depending on your situation. But generally, upon completion of the loan process, it may take around 30 to 60 days for the funds to become available. Appraisal times, financial counseling sessions, and other requirements may affect this timeline. Does Open Mortgage have insurance requirements? Yes, Open Mortgage has insurance requirements for a reverse mortgage. Borrowers are required to maintain homeowner’s insurance on the property throughout the life of the loan. Open Mortgage requires this insurance to protect its investment. The specifics of what kind of insurance and the coverage required depend on individual loan agreements. Can you back out of a reverse mortgage contract? It’s indeed possible to back out of a reverse mortgage contract. Borrowers have what’s called a “Right of Rescission,” a federal law that grants them a three-day period to cancel the reverse mortgage transaction without penalty following the loan closing. It’s crucial to read the loan agreement and understand the terms before committing or deciding to rescind. We recommend making financial decisions like these only after careful contemplation and consulting with a trusted financial professional.