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Many seniors find themselves being targeted by lenders trying to convince them that a reverse mortgage is the ideal solution for their financial needs in their later years. Sound familiar? You might be wondering what exactly a reverse mortgage is and how it works.
You're probably very familiar with a traditional mortgage: a loan you take out, usually for a period of 15-30 years, to buy a property and build up equity with every payment. A reverse mortgage lets you take out a new loan that borrows against that equity: you may receive a lump sum payment, get monthly deposits (as if the lender is "paying" you), or establish a line of credit to use as needed.
Wednesday, December 6th
All Reverse Mortgage is an excellent choice: they offer online, real-time quotes without requiring a phone call with a representative, complete transparency with respect to rates and fees, and reverse mortgages with the lowest interest rates on the market. This lender has a sterling reputation for honesty and integrity, with glowing praise from satisfied clients. All Reverse Mortgage earns our highest recommendation.
Longbridge Financial puts Ivy League expertise to work for you. This lender offers reverse mortgages with rates much lower than its competitors, and services are backed by a pledge to look out for your best interests: no selling you a loan that won't be a good financial decision. Using the estimator tool on the Longbridge site can give you a pretty close idea of what to expect before you speak with a representative. Longbridge Financial can be trusted to help you find the reverse mortgage that's best for your situation.
Reverse Mortgage Funding (RMF) offers not one but five types of loans to consider. This lender has a strong reputation for quality and affordability, but if you get a better offer from another provider, RMF will give you a $1,000 Visa gift card. No quotes are available through the RMF website, so you'll have to talk with a rep to learn more about the reverse mortgage programs you're eligible for. Clients have overwhelmingly positive things to say about the loan experience here, making RMF a lender to consider for your reverse mortgage.
Short Liberty Reverse Mortgage has been around for the better part of two decades and focuses strictly on this type of loan: more than 60,000 clients have used this service to get the most out of their home equity in their later years. Although the Liberty website isn't as transparent as some - you'll have to get in contact with a loan rep to find out your available loans and rates - they back their reverse mortgages with a set of generous, customer-friendly guarantees. Liberty Reverse Mortgage earns a good rating.
GoodLife Home Loans has been around for almost a decade and services reverse mortgages in just over 30 states. They've got great feedback from clients and the BBB, and they're proud to say their interest rates are lower than average. We wish they'd go a little further to prove it right off the bat: no specifics are offered until you talk with a GoodLife representative. Because this lender doesn't operate in all 50 states and makes clients jump through several hoops to get info, it winds up towards the middle of our rankings for reverse mortgage companies.
Finance of America Reverse (or FAR for short) has three types of loans available to consumers of retirement age: traditional HECMs, jumbo loans up to $4 million through their HomeSafe platform, and EquityAvail for those who aren't eligible for a traditional reverse mortgage. FAR is in good standing with the BBB, but more recent client feedback isn't as positive as it used to be. Plus, interest rates here tend to be higher than some of FAR's rivals. We suggest checking out what the competition can offer first, and keeping FAR as a backup lender for reverse mortgages.
American Advisors Group (AAG) may be the reason you've heard of reverse mortgages, with frequent TV and radio ads often featuring actor Tom Selleck. They fund more of this specialized loan type than any other company, and thousands of clients have given AAG a five-star rating. However, you'll get no specifics about your options until you've spoken with a representative, and AAG continues to have issues in court regarding deceptive practices prior to loan closing. This keeps AAG from earning our recommendation.
LowerMyBills serves as a connection between borrowers and lenders across a spectrum of financial products. Although the Better Business Bureau gives this service an "A+" , we found no reason to recommend it for homeowners looking into reverse mortgages. Despite filling out a thorough online form, we weren't connected with a single suitable option - and we were given recommendations for lots of services we didn't need or qualify for. Don't waste your time with LowerMyBills.
That loan balance can be paid off at any time, but most reverse mortgages assume repayment will take place when the borrower dies, using the funds from the sale of the home to do so. When you have a reverse mortgage, you are expected to continue paying property taxes and homeowner's insurance premiums, and to keep the property well-maintained.
Are you eligible for a reverse mortgage? Most loans of this type are Home Equity Conversion Mortgages (HECMs) and are heavily regulated by the Federal Housing Administration. The FHA requires that the mortgaged property be owner-occupied for at least 183 days per year (more than half of the time), and that all persons on the title participate in counseling with an authorized HUD counselor before the loan can be funded. That last requirement is to help protect seniors from entering into financial obligations that aren't in their best interests.
With so many TV ads, radio spots, and maybe even phone calls and snail mail coming to you, it can be overwhelming trying to learn about reverse mortgages and to sort out the great lenders from the not-so-good. But, if you keep these criteria in mind, you'll be able to find the right company to start your reverse mortgage research:
TopConsumerReviews.com has evaluated and ranked the most popular providers of reverse mortgages. We're confident that this information will help you - or your elderly loved ones - find the right way to use a reverse mortgage to provide a solid financial foundation for many years to come.
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