7 Best Reverse Mortgage Companies for September 2024

Reverse mortgages kick the proverbial can down the road, not forcing you to repay that borrowed amount until the home is sold or the borrowing homeowner dies. Here’s a look at what the best reverse mortgage lenders offer to eligible borrowers.

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Best reverse mortgage lenders compared

Methodology

In order to find and choose the best reverse mortgage companies for homeowners, we looked at and compared specific lender criteria. This included factors such as lender availability, eligibility requirements, mortgage products, repayment options, funding speed, and expenses. We also considered the ease of the application process, satisfaction ratings, and customer service availability.

How to select the right reverse mortgage company

Not sure how to pick the best reverse mortgage company for you and your needs? Here are some things to consider.

How much you need to borrow

Some reverse mortgage lenders cap borrowing at the annual limit set by the Federal Housing Authority (FHA), which is $1,149,825 in 2024, while others offer jumbo loans that let you borrow as much as $4 million. The right lender for you can depend on how much equity you need to tap.

Where you’re located

While some reverse mortgage lenders operate nationwide, others are only available in some states. In particular, four of the seven companies on our list do not offer their reverse mortgage products in New York State.

How you plan to use the funds

There are a few different types of reverse mortgages available. The right one for you depends on whether you’re using the funds to cover everyday expenses or are planning to buy another home with the proceeds.

How old you are

Standard reverse mortgages are only available to homeowners age 62 or older. However, some proprietary jumbo loans may be available to homeowners as young as 55.

Alternatives to a reverse mortgage

Not sure if a reverse mortgage is right for you? Here are some alternatives to consider.

Calque

Calque is a mortgage lender offering an unusual trade-in mortgage product. It allows you to tap into your property’s equity while shopping around for a new home, so you can use those funds toward the down payment on your new purchase. Like a reverse mortgage, you’ll need to repay this debt as soon as your current home is sold.

Warp Speed Mortgage

If you’re interested in a cash-out refinance or simply lowering your monthly payment, Warp Speed Mortgage can help. It allows you to refinance your existing home mortgage loan to lower your interest rate, adjust your monthly payment, change your loan term, or tap into your home equity for various purposes. The right loan can accomplish all four objectives simultaneously.

More about reverse mortgages

Want to learn even more about reverse mortgages and how they can help homeowners reach their funding goals? Here’s what you need to know.

What is a reverse mortgage?

A reverse mortgage is a product that allows homeowners to tap into their home equity without needing to pay back that debt as long as they’re alive and living in the home. These funds can be used to cover everyday expenses, make a large purchase, travel the world in retirement, or even buy another property.

How does a reverse mortgage work?

With a reverse mortgage loan you’ll receive a lump sum or monthly installment payment of funds borrowed against your home equity. This debt, plus interest and fees, will sit unpaid as long as you are alive and living in the home. If you sell the property, you’ll be required to repay the reverse mortgage lender at the time of the sale. If you die, your heirs will be required to repay the debt, either through the sale of the home or with the help of a new mortgage loan in their own name.

What fees do reverse mortgages charge?

Reverse mortgage lenders charge origination, appraisal, and application fees, as well as discount points and more. These are often similar to the fees and charges paid on standard home mortgage loans.

Types of reverse mortgages

There are a few different types of reverse mortgage loans to consider, depending on your needs. These include:

• Home equity conversion mortgage (HECM). Insured by the FHA, a HECM allows you to tap into a portion of your home equity for pretty much any purpose.
• HECM for purchase. A HECM for purchase works just like a standard HECM, except that the funds borrowed are earmarked for the purchase of a new property.
• Single-purpose reverse mortgage. A single-purpose reverse mortgage is designed for one specific expense, such as a large home repair or property taxes.
• Proprietary reverse mortgage. With a proprietary reverse mortgage, such as a jumbo loan, borrowers can take out more than the FHA’s annual limit and may even be able to qualify for a reverse mortgage sooner (at 55 as opposed to 62).

Reverse mortgage pros and cons

Pros

• Allows you to tap into your home equity.
• Borrow up to $4 million.
• No monthly payment requirement.

Cons

• Can be costly.
• Will need to be repaid by your heirs or when you sell.
• Eligibility limits including minimum borrower age.

Who are the largest reverse mortgage lenders in the U.S.?

Some of the largest reverse mortgage lenders in the country include Finance of America Reverse (FAR), American Advisors Group, Fairway Independent Mortgage, Mutual of Omaha Reverse, Longbridge Financial, and Liberty Reverse Mortgage. Not all lenders operate in all states.

TIME Stamp: Consider our top choices for reverse mortgage companies

Reverse mortgage loans allow homeowners to tap into their home equity without incurring a new monthly repayment. However, there are many downsides to these types of loans, which can endanger your children’s inheritance or affect your ability to sell and buy another home, both by reducing your equity. It’s important to understand reverse mortgages and how they’ll affect you before applying for one.

Frequently asked questions (FAQs)

What is the average interest rate on a reverse mortgage?

Mortgage interest rates, including on reverse mortgages, change all the time and will vary according to each borrower’s eligibility. However, according to a survey conducted by HSH.com, a 35-year-old mortgage advice website for consumers, the average interest rates for a traditional HECM as of March 24, 2024, are 5.53% fixed and 7.30% variable.

What type of home is not eligible for a reverse mortgage?

Typically, reverse mortgages are not allowed on homes that are not principal residences, such as vacation or rental properties. Depending on your lender, you may or may not be allowed to take out a reverse mortgage on a townhouse, condo, manufactured home, mobile home, or multifamily property.

How does a reverse mortgage work?

A reverse mortgage pays you a lump-sum payment or monthly installments on a home that you already own. As long as you live on your property, you won’t need to repay these advanced funds. However, when you die or the home is sold, you (or your heirs) will be responsible for repaying any debt plus incurred interest.

What is the maximum amount you can take out on a reverse mortgage?

Most lenders will limit you to borrowing as much as $4 million with a jumbo reverse mortgage. If a lender doesn’t allow for jumbo loans, you’ll be limited to the FHA’s annual lending limit, which is $1,149,825 in 2024.

How do you pay back a reverse mortgage?

Most reverse mortgages are repaid either when you sell the home or die, at which point your heirs become responsible for the debt. If your heirs want to keep the property, they can apply for a new mortgage loan for the home and pay off any remaining balance, including accrued interest.

How does a reverse mortgage work when you die?

When you die, your heirs will be responsible for repaying your reverse mortgage balance. This can be done by selling the home and paying the outstanding balance plus fees and interest or taking out a new mortgage loan and keeping the property.