Longbridge Reverse Mortgage Review
Longbridge Financial, LLC is a company headquartered in New Jersey that offers FHA-insured reverse mortgage products to Americans 62 and older. The company also offers jumbo proprietary reverse mortgages for homes that are valued above the FHA established limit.
Reverse mortgages, or Home Equity Conversion Mortgages (HECM), are loans available to older adults who own their home or have a small remaining mortgage balance. These loans allow homeowners to access their home equity. As long as the borrower stays in the home and meets certain criteria, they are not obligated to repay the loan. Reverse mortgages become due when the borrower moves out of the house or dies.
Best reverse mortgage lender for pricing
We selected Longbridge mainly because of its favorable pricing. In our research, Longbridge consistently offered rates at the lower end of the spectrum. That said, rates fluctuate daily based on market conditions, and we cannot guarantee this will always be the case.
Longbridge’s website also offers valuable educational materials to help borrowers and their families make informed decisions about this financial product.
Longbridge reverse mortgages pros and cons
- Favorable pricing
- Informative website with educational resources
- Remains your servicer after closing
- Jumbo loans available at age 55
- No branch offices
- 55+ loans are not available in every state
Pros explained
Favorable pricing
Longbridge offers some of the lowest rates among all the reverse mortgage providers we reviewed. Unlike regular forward mortgages, with a reverse mortgage, you don’t need to pay the interest until the loan matures. Therefore, a lower interest rate means a reduced amount that you, your spouse, a co-borrower or your estate will need to repay when the loan becomes due.
Interest rates also figure into how much you can borrow in the first place, along with your age and home value. The lower the rate, the more you may be eligible for. This is important to keep in mind as different lenders feature different rates.
Additionally, Longbridge does not charge a monthly loan servicing fee like many other reverse mortgage providers. The company also has a $500 discount on closing costs for active duty military servicemembers and veterans.
Informative website with educational resources
Reverse mortgages can be a complex subject to understand. While they can be an excellent financial tool in some situations, they are not for everyone. Longbridge offers comprehensive, plainspoken and user-friendly educational materials on its website, covering all aspects of the reverse mortgage process. Additionally, they provide a free information kit you can request.
Some of the topics addressed are what is a reverse mortgage, reverse mortgages vs. other home equity products, what you can use a reverse mortgage for, and a section addressing concerns of adult children and family members of the potential borrower.
Remains your servicer after closing
It’s common for mortgage lenders to sell servicing rights to other lenders. This transfer can be confusing to customers if they have already become accustomed to dealing with the original company and its way of doing things. When you get a reverse mortgage with Longbridge, you will continue to do business with the company for the life of the loan.
Jumbo loans available at age 55
Jumbo reverse mortgages are designed for higher-value properties. As of this writing, the standard reverse mortgage program allows borrowing against properties up to $1,089,300. In contrast, jumbo reverse mortgages extend this limit to $4,000,000.
Furthermore, while traditional reverse mortgages are only available to individuals aged 62 and older, Longbridge’s jumbo loans have a lower age limit of 55.
Cons explained
No branch offices
Longbridge Financial is headquartered in New Jersey and operates without physical branches. This could be a dealbreaker for those who want face-to-face interaction before making a major financial decision. However, this will not be a problem if you are comfortable communicating over the phone or online.
55+ loans are not available in every state
Longbridge jumbo loans are restricted to individuals aged 55 and older, but eligibility varies by state. Unfortunately, the company does not provide a list of ineligible states. You must contact Longbridge directly to see if the jumbo loan product is available in your state.
Longbridge reverse mortgage offerings
HECM reverse mortgage
The home equity conversion mortgage (HECM) is the standard reverse mortgage product insured by the Federal Housing Administration. Longbridge offers fixed and variable rate options. How you receive your funds can depend on the option you choose. It’s also important to remember that if there is still a balance on the current mortgage, the HECM funds must first go to paying that off.
Fixed-rate reverse mortgage
Fixed-rate reverse mortgages provide the peace of mind of always knowing what you owe. However, they come with limitations. Fixed-rate reverse mortgages are somewhat inflexible as they can only be disbursed as a one-time lump sum payment of up to 60% of the home’s appraised value.
This can be a useful option for those who are in need of a large infusion of cash for a specific purpose. If you are looking for more varied disbursement options, the variable rate option might be more suitable.
Variable rate reverse mortgage
Though variable rate reverse mortgages run the risk of your interest rising over the course of the loan, they do come with significant benefits in the way of disbursement options and interest charges.
With the variable option, you can choose a lump sum, monthly or term payment, a line of credit, or a combination of any of these. This flexibility is ideal for ongoing home improvements. You can take an initial lump sum payment for immediate needs and keep the rest as a line of credit for future projects.
Unlike a home equity line of credit (HELOC), you’re charged interest only on the amount you withdraw, and there are no obligatory payments. Additionally, the value of lines of credit can grow over time as interest is applied to the principal.
HECM for purchase
A HECM for purchase involves taking out a reverse mortgage on a FHA-approved home or condo to help purchase it. This option is ideal for older adults looking to downsize or secure a home more in line with their current needs, while also cutting costs. Because the reverse mortgage is used to pay for the home, rather than buying the home first and then getting a reverse mortgage, borrowers incur only one set of closing costs.
The down payment required for an HECM for purchase is sizable — typically 60%-65% of the new home’s cost. This amount can come from the sale of the existing home or cash on hand. The reverse mortgage covers the remaining cost, and any additional funds can be used at your discretion.
After this initial payment, the setup is akin to a traditional HECM for purchase. You won’t have to make monthly payments as long as you stay current on property taxes, maintenance and insurance. The reverse mortgage balance is due when the last surviving homeowner leaves the home for 12 months or dies.
Longbridge Platinum
Longbridge Platinum is the name of Longbridge’s proprietary jumbo reverse mortgage loan. Designed for high value homes and condos, the upper loan limit of this product is $4,000,000, much higher than the traditional HECM reverse mortgage. It can be disbursed as a lump sum or line of credit.
Jumbo reverse mortgages are not backed by the FHA, therefore the risk is incurred by Longbridge. However, these mortgages provide the same protections as traditional ones. As long as you maintain the property and pay taxes and insurance, you won’t have to make monthly payments on your home. Moreover, your heirs are not responsible for the balance, even if the loan amount exceeds the home value.
Longbridge reverse mortgage pricing
Reverse mortgage fees will differ based on the lender you go with, but they typically include origination fees, appraisal fees, and the counseling fee for the session all borrowers must complete beforehand.
Appraisal fee
The appraisal is done by an independent third-party appraiser to determine your home’s market value, which in turn will dictate your reverse mortgage amount. The appraiser will also check if your home meets the minimum HUD property standards. If not, repairs might be necessary, leading to a second appraisal.
The appraisal fee is approximately $575, and the follow-up appraisal costs around $125.
Origination fee
The origination fee for reverse mortgages, similar to conventional mortgages, covers processing and closing costs. Because these loans are government backed, the FHA has set specific caps on origination fees. They are as follows:
- For homes valued at less than $125,000 or less, the origination fee limit is $2,500.
- For homes worth more than $125,000, the lender can charge up to 2% on the first $200,000 and up to 1% of the home's value above $200,000, totaling up to a maximum fee of $6,000.
Closing costs
Closing costs fluctuate based on loan terms, home value and location. These expenses could include title insurance, state taxes, recording fees and the mortgage insurance premium. There could also be additional closing costs, so it is important to confirm the charges with Longbridge The company guarantees transparency and no hidden fees.
Service fee
Longbridge does not charge a monthly servicing fee.
Counseling fee
Reverse mortgage borrowers must complete a counseling session with a HUD-approved counselor. This step ensures customers fully understand their options and what they are getting into with a reverse mortgage. The session typically costs $125, although it can sometimes be waived based on the person’s financial situation.
Interest rates
Interest rates on reverse mortgages change daily. To determine the rate you could expect, consult your lender. Keep in mind that the fixed interest rate option on a reverse mortgage only allows for a lump sum of 60% of the home’s value. The adjustable rate, though variable, offers more disbursement options and charges interest only on the amount borrowed.
Longbridge reverse mortgage financial stability
In June of 2023, DBRS Morningstar confirmed Longbridge Financial, LLC MOR RVO2 rating, categorizing it as “good” and further labeling it as “Stable.” This rating, the agency’s second highest, was granted due to Longbridge’s experienced senior staff, profitability, strong loan performance and underwriting team.
In simpler terms, this means Longbridge is a dependable choice as the servicer of your reverse mortgage, especially if you opt for a line of credit or term disbursement. The rating indicates a high level of trust in Longbridge’s ability to meet their financial obligations regarding your loan.
Longbridge reverse mortgage accessibility
Availability
Longbridge’s reverse mortgage eligibility requirements align with the standard criteria. Firstly, applicants must be 62 or older. They should either own their homes outright or possess significant equity in them, with the property serving as their primary residence. Moreover, the home must be in good condition and meet the necessary property standards.
Prospective borrowers must not have any outstanding federal debts, such as unpaid taxes or federal student loans. To qualify, applicants must also receive counseling from an agency approved by the U.S. Department of Housing and Urban Development (HUD).
Contact information
Customers can contact Longbridge Financial by phone, email or an online form on its website. The company also offers a free information kit that you can request. To get it you will need to enter your:
- Name
- Address
- Phone number
- Age
- Estimated house value
- Mortgage balance (if any)
Longbridge’s contact number is 855-LBF-HECM (855-523-4326).
Longbridge reverse mortgage customer satisfaction
Longbridge Financial has been accredited by the BBB since 2013 and maintains an A+ rating. As of October 2023, Longbridge has over 60 reviews, averaging 3.97 out of 5 stars. Additionally, all complaints filed with the BBB have been addressed and resolved by the company.
Apart from BBB ratings, various online review platforms highlight Longbridge’s commitment to exceptional customer service. Customers often describe their experiences as both professional and supportive.
Longbridge is also a member of the National Reverse Mortgage Lenders Association (NRMLA), an organization that enforces a strict code of ethics among reverse mortgage providers.
Several factors determine the amount you can receive from a reverse mortgage, including your home's appraised value, interest rates, outstanding debts against the house and your age.
As of 2023, the maximum home value eligible for a reverse mortgage is $1,089,300. If your home's value exceeds this amount, you would need to explore one of Longbridge's jumbo offerings.
How we evaluated Longbridge Financial’s reverse mortgage
In our evaluation of Longbridge Financial, we considered several essential aspects, which included:
- Product Offerings: We examined the available reverse mortgage products and their advantages for homeowners.
- Customer Feedback: We looked at the company’s customer ratings and number of complaints..
- Financial strength: We analyzed the company’s financial ratings to determine its financial stability.
Summary of Money's Longbridge reverse mortgage review
Longbridge stands out among the best reverse mortgage providers for its competitive pricing, offering low rates and no monthly service fee. The company continues to serve as your loan servicer after closing, which can make things considerably easier for older adults.
Additionally, Longbridge provides excellent educational materials on its website, offering comprehensive and user-friendly resources and guiding borrowers through every aspect of the reverse mortgage process.
On the downside, Longbridge does not have physical branches, and their jumbo loan for those 55 and older is not available in every state.