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Best Reverse Mortgage Lenders

Latest update: March 30, 2021

15

Lenders Considered

6

Lenders Selected

40

Hours Analyzed

We evaluated 15 well-known reverse mortgage lenders, and after careful review identified the 6 best reverse mortgage companies in 2021

Table of Contents

Finance of America Reverse

Great Service

5/5

Best Reverse Mortgage Lenders 2021

Finance of America Reverse

5/5

As a member of the National Reverse Mortgage Lenders Association (NRMLA), Finance of America Reverse has retailers licensed in 43 states and a wholesale division licensed in 42 states and Puerto Rico. Its goal is to help you optimize your retirement, help ease financial worries and diversify your investments through a reverse mortgage.

Finance of America Reverse

5/5

As a member of the National Reverse Mortgage Lenders Association (NRMLA), Finance of America Reverse has retailers licensed in 43 states and a wholesale division licensed in 42 states and Puerto Rico. Its goal is to help you optimize your retirement, help ease financial worries and diversify your investments through a reverse mortgage.

Finance of America Reverse

5/5

As a member of the National Reverse Mortgage Lenders Association (NRMLA), Finance of America Reverse has retailers licensed in 43 states and a wholesale division licensed in 42 states and Puerto Rico. Its goal is to help you optimize your retirement, help ease financial worries and diversify your investments through a reverse mortgage.

Finance of America Reverse

5/5

As a member of the National Reverse Mortgage Lenders Association (NRMLA), Finance of America Reverse has retailers licensed in 43 states and a wholesale division licensed in 42 states and Puerto Rico. Its goal is to help you optimize your retirement, help ease financial worries and diversify your investments through a reverse mortgage.

In this guide, we’ll cover how a reverse mortgage works, provide tips for making wise reverse mortgage decisions, examine the best companies in the industry and answer some frequently asked questions about the process. By the time you’ve gone through this guide, you’ll not only have a clear idea of how reverse mortgages work, but should also feel confident enough to choose a lender that is the best fit for your needs.

Top tips:

Tips for a Wise Reverse Mortgage Buyer

Before you commit to a reverse mortgage, you should know exactly what it is you’re getting. Ask lots of questions (read frequently asked questions). Going into a transaction of this magnitude unprepared or without the right knowledge could cost you money in the long run.

For starters, what exactly is a reverse mortgage? It’s a financial agreement between you and a financial institution. You agree to leverage equity in your home in exchange for funds from the financial institution and/or line of credit. Funds received may take the form of monthly payments, a lump cash sum, or irregular payments based on your line of credit activity. You can use funds from the reverse mortgage to meet your needs at your discretion, such as home repairs, medical bills, groceries, or anything you need. But before you sign the dotted line to get payments, take a look at these wise buyer tips first:

Our Reverse Mortgage Expert

Dan Hultquist is the author of the book Understanding Reverse, which is the standard reverse mortgage guidebook for consumers and lenders alike. As a Certified Reverse Mortgage Professional (CRMP), and co-chair of the Education Committee for the National Reverse Mortgage Lenders Association (NRMLA), Dan speaks nationally on the topic of Reverse Mortgages.

Make sure you know about all the costs

A reverse mortgage is similar to a standard home loan in some ways – both have closing costs. Make sure to account for all costs like origination fees and mortgage insurance premiums. Because you’re not required to make payments on a reverse mortgage, the principal balance won’t go down during the course of the loan. However, interest will get tacked on to the outstanding balance every month, so as time goes on that balance will get higher, according to the Federal Trade Commission. It’s also important to note that many reverse mortgage interest rates are variable and could change over time depending on the market. To receive a fixed interest rate, you will have to take your loan as a lump sum. These fixed interest reverse mortgages are referred to as “closed-end” loans, because you receive funds at once, and no other draws are permitted. For this reason, the vast majority of all HECMs (Home Equity Conversion Mortgages) are now variable rate loans. This allows the borrower to only draw what is needed and leave the remaining available funds in a growing line-of-credit for future financial needs. Another one of the requirements of the loan is the homeowner must be willing and able to pay their own property taxes and insurance. If you are not interested in making these payments, the lender may set-aside funds upfront to pay these charges on the borrower’s behalf through their expected lifetime. Interest may not be deductible on income tax returns. For 2019, interest can be deductible under specific cases. For example, if you used a reverse mortgage to buy your home, the debt is 100% “acquisition debt” and interest on it may be deductible. However, no deduction is possible unless, or until, the borrower makes payments. While most borrowers don’t make regular payments during the entire term of the loan, there is a very large payment that occurs at the end. Whoever you choose as your lender, discuss these costs with them so you aren’t surprised when the bill comes.
 Reverse Mortgage LenderBest For
1Finance of America ReverseGreat Service
2Liberty Reverse MortgageGreat Guarantee
3American Advisors Group (AAG)Fastest Closing
4LendingTreeGreat Online Experience
5Magnolia BankGreat Rates
6EasyKnockGreat Personalization
7One Reverse MortgagesGreat Products

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