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Best Reverse Mortgage Lenders of 2023

A reverse mortgage can be a way to deal with long-term financing. They can help pay off your mortgage, cover healthcare expenses, or otherwise supplement your income – provided you meet certain requirements.

They aren’t for everyone, though. If you plan on moving, you and your spouse are younger than 62, or you’d like to bequeath the home to your heirs, then a reverse mortgage isn’t the right fit for your needs.

We evaluated the leading reverse mortgage lenders in the U.S. and narrowed down our list.

Last Updated: September 2023
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  • 96% Customer Satisfaction Rating
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Money’s Top Picks

  • American Advisors Group

    Best Overall Reverse Mortgage Lender

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    The most well-recognized name in reverse mortgages in the U.S., AAG is our pick for best overall thanks to its wide array of reverse mortgage products and its commitment to educating its borrowers.

    AAG offers five different reverse mortgage products:

     
    • Lump-sum payout: This option allows for the largest immediate cash payout, up to 60% of the qualifying amount in one single payment.
    • Growing Line of Credit: As the name says, this line of credit sees the untouched principal grow over time, and is therefore best used sparingly for unexpected expenses.
    • AAG Advantage Jumbo Loan: This proprietary loan allows borrowers to access up to $4 million at closing. Other advantages include eliminating your monthly mortgage payment, and not having to pay mortgage insurance.
    • Term or Tenure: Term reverse mortgages allow borrowers to receive payments for a set amount of time (the term). With the tenure option, on the other hand, you receive payments so long as you live in the home and meet the loan terms.
    • Reverse for Purchase: This option is best for people looking to downsize, since it allows you to buy a home, without incurring monthly mortgage payments.

    Potential initial costs of a reverse mortgage with AAG both include and are affected by several factors, such as PMI (Private Mortgage Insurance), interest rates, origination fees, your payment choice, appraisal and title search fees, among other closing costs. This can total anywhere between $6-$8k.

    Though AAG does not charge a servicing fee throughout the life of the loan, you will have to pay an annual PMI, as well as an upfront premium payment at closing. Additionally, as with any reverse mortgage, you will also be responsible for the real estate property taxes and homeowners insurance. This may add up to $9k in annual costs.

    Typical turnaround time is 30 days, from submitting the application to closing time.

    Pros

    • Loans up to $4 million with AAG Advantage
    • Free online reverse mortgage calculator with pre-qualification form
    • Multiple reverse mortgage options
    • Educational resources include free information kit and expert customer service

    Cons

    • Jumbo HECMs only available in 24 states
    • Fees and initial costs can go up rapidly

Reverse Mortgage Lenders by State

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HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas
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Reverse Mortgage FAQs

How does a reverse mortgage work?

To understand how reverse mortgages work, first, you need to understand what equity is. In real estate terms, equity is the real market value of your property minus any mortgages still owed on it.

For example, if your home is valued at $300,000 and you still owe $100,000 on the mortgage, your equity is $200,000.

That’s the amount you would be able to borrow through a reverse mortgage.

If, on the other hand, you don’t have a mortgage on the house, then the full market value of the property is the equity you have available.

When you apply for a reverse mortgage, the bank will issue you a payment for the equity amount you want.

This money is yours tax-free and may be paid upfront in a single lump sum, in monthly payments, as a line of credit, or in a combination of all three.

Who can get a reverse mortgage?

Aside from the most salient requirement of a reverse mortgage, namely that borrowers must be age 62 or older, there are a few other conditions:

  • The home must be your principal residence (you must live in it for over half the calendar year), and you must own it outright or have a low mortgage balance
  • You cannot be delinquent on any federal debt, such as student loans or federal income taxes
  • Once you get the reverse mortgage, you must be able to pay for ongoing property costs, including insurance, taxes, and maintenance or repair costs
  • The home must meet certain property standards, both in terms of its type and its overall condition
  • Potential borrowers must receive counseling with a HUD-approved reverse mortgage counseling agency

What Can a Reverse Mortgage Be Used For?

Depending on the kind of reverse mortgage you choose, there may be limits placed on how you can use the money.

For single-purpose reverse mortgages, the purpose for the money needs to be reviewed and approved by the lending agency.

HECMs generally don’t put limits on how you can use the money; however, the house has to comply with HUD’s minimum property standards, so you may have to use some of the loan money to pay for improvements so the structure can be eligible for the loan.

To Summarize: Best Reverse Mortgage Lenders of 2023

In the end, the best reverse mortgage lender in 2023 is the one that can offer you the best terms and interest rates, plus the lowest fees.

Still, our list of top picks can serve as a starting point to simplify your journey and point you in the right direction, when looking for the right financing option to purchase the home of your dreams.

Money's Partners
Money's Recommendation
  • #1 Reverse Mortgage Lender in the Nation
  • As Seen on TV with Tom Selleck - The Reverse Mortgage Loan for Tax-Free Cash, and Stay in Your Home
  • 96% Customer Satisfaction Rating
  • Available in 49 states, 24/7 to answer your questions
  • Click View Rates & Enter Your Zip Code for Free Information Kit on Pros & Cons
Visit Site