As Americans grow weary of paying higher prices at the pump, grocery store and elsewhere, many are looking for extra ways to make ends meet. One option for senior homeowners is taking out a reverse mortgage.
A reverse mortgage is a unique type of mortgage loan for older borrowers, usually 62 or older. These loans enable you to convert a portion of your home equity into cash. Taking out a reverse mortgage can provide a lifeline for anyone on a fixed income who wants to continue living in their home but needs extra cash to pay for living expenses.
Reverse mortgages can provide you with funds in various ways, including a lump sum of cash, an open credit line or steady monthly payments. The most popular reverse mortgage is the Home Equity Conversion Mortgage (HECM), a government-backed reverse mortgage with a borrowing limit of up to $1,089,300. You’ll eventually have to settle the loan when you move out of the home. Typically, borrowers or their heirs repay the reverse mortgage from the proceeds of the house sale.
To help you explore your options, we broke down the best reverse mortgage companies into several categories.
Explore your reverse mortgage options here to see how much you’re eligible to withdraw.
Best reverse mortgage companies 2023
Here are our picks for the best reverse mortgage companies currently.
Best overall: Fairway Independent Mortgage
Fairway Independent Mortgage is our choice for the best reverse mortgage lender in 2023. Although the company is smaller than many of its competitors, they have hundreds of local offices for in-person support, strong customer reviews, an A+ Better Business Bureau (BBB) rating, and competitive interest rates.
The company provides up to six options for receiving your proceeds, including a lump sum payout, fixed monthly payments or a line of credit. If you have at least 50% equity in your home, you may qualify for a reverse mortgage. Check with Fairway to learn more about its qualifications and to walk through your options.
Best for low interest rates: Longbridge
As with other types of loans, interest rates vary by lender. Longbridge Financial consistently offers some of the lowest rates available in the reverse mortgage sector. According to its website, reverse mortgage rates typically fall just below those of fixed-rate mortgages.
Longbridge lowers the age requirement to 55 for its jumbo Longbridge Platinum mortgage. If you’re thinking about downsizing, Longbridge also offers the HECM for Purchase reverse mortgage to help you purchase a new primary residence and reduce your out-of-pocket expenses. The company provides extensive information and resources on its website, including a reverse mortgage calculator and a FAQ page.
Best for customer service: Finance of America
Finance of America Reverse is one of the largest reverse mortgage lenders in the country. But while many large corporations struggle to provide excellent customer service, that’s not the case with Finance of America Reverse. The lender pairs an A+ BBB rating with a 4.2 TrustPilot rating.
One little-recognized element of customer service is providing resources so borrowers don’t have to call for service. Along these lines, the Finance of America Reverse website offers an informative blog, a mortgage calculator and an extensive FAQ page that answers pertinent questions for each of its products.
Best reviewed: American Advisors Group (AAG)
American Advisors Group (AAG) is another top reverse loan originator and for good reason. They deliver for their customers, who love to share their experiences. The company boasts over 7,000 combined reviews on Trustpilot and Better Business Bureau, with 4.6 ratings on both platforms.
AAG allows you to receive your funds in numerous ways, including a lump sum payment or line of credit. You can use the money to pay off your mortgage—a loan requirement—or for in-home care, home improvements or to help make ends meet.
Best for owners who need cash now: Fairway Independent Mortgage
Generally, the reverse mortgage application process ranges from 30 to 45 days. Remember, the Department of Housing and Urban Development (HUD) requires you to complete reverse mortgage counseling before you can apply. You may need to be patient to receive your money.
Fairway Independent Mortgage has been working to accelerate its funding times, and the lender can close some loans in as few as 17 days. So if you need cash soon, the company may be worth considering. Still, it’s always wise to shop and compare multiple loan offers to identify loans with the best balance of rates, flexible funding and repayment terms, fees and other considerations. Use the below table to explore some of your best options in one place.
The bottom line
Getting a reverse mortgage can help you access the cash you need, but it’s not without risk. If you don’t live in your home as your primary residence, fail to upkeep it or fall behind on required costs like property taxes or HOA insurance, the lender could foreclose on your home.
If you want to learn more, you can speak with your current bank or credit union or get quotes from the above lenders. Comparing several reverse mortgage loan options can help you identify which one best addresses your short-term and long-term needs.