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A reverse mortgage is a type of specialty mortgage product also known as a home equity conversion mortgage. It’s offered to homeowners who meet certain qualifications: You must be a minimum age of at least 62 years old (in most cases) and have some equity in your home. A reverse mortgage is essentially a loan that doesn’t require any immediate payments. Instead, you can pay off as much or as little as you want. The loan typically becomes due when the borrower dies, permanently moves out of the home, or sells the home.
Federal guidelines do not allow the loan balance to exceed the home’s value, which ensures that the borrower’s heirs won’t get stuck with additional debt. Keep in mind that upfront costs are usually involved and although most reverse mortgages are federally insured, scams that try to prey on seniors do exist. It's important to thoroughly research the lender and read your contract. Continue reading to see which reverse mortgage company might be a good fit for you.
Best Overall: Reverse Mortgage Funding
Why We Chose It: The company has positive ratings, lenient borrower qualification requirements, and lends in 49 states.
Borrowers can qualify at 60 years old in most states
Focuses exclusively on reverse products
Price matches interest rates and fees
Website could use some updating
Limited loan products outside of reverse mortgages
Reverse Mortgage Funding (RMF) was founded in 2012 by a group of industry veterans. Its sole focus is on providing different types of reverse mortgages to seniors and offering excellent customer service throughout the life of the loan. It lends in all 50 states to qualified borrowers aged 62 and up, but it also offers a program called Equity Elite that borrowers aged 60 and up in most states can qualify for.
You can check your eligibility online and speak to a dedicated loan specialist. RMF offers fixed and adjustable-rate reverse mortgages as well as mortgages that allow you to purchase a new primary residence. The entire loan process typically takes 30 to 45 days. Flexible payouts are offered as lump sums, lines of credit, monthly reimbursements, and combination payouts.
RMF’s qualifications are more lenient than many other lenders; for example, it lends to owners of condos who are not eligible for Federal Housing Administration loans. The company will finance multi-family homes, condos, townhomes, and single-family homes and has higher loan amounts that can exceed $4 million.
Best for Multiple Types of Reverse Mortgages: American Advisors Group
Why We Chose It: American Advisors Group offers different types of reverse mortgages, including a jumbo loan, and lends in all 50 states.
Free reverse mortgage loan calculator
Retirement tips and helpful industry articles
Upfront fees are involved but estimates aren’t displayed on the website
Website feels a bit pushy and like a commercial
American Advisors Group (AAG) was founded in 2004 in Orange County, California. Its mission is to help older Americans secure a better retirement by responsibly using the equity in their home. The company is a member of the National Reverse Mortgage Lenders Association and is an approved lender of the Department of Housing and Urban Development (HUD).
AAG specializes in reverse mortgages and offers them to qualified applicants in all 50 states who are aged 62 and over (60 in some states). It handles traditional reverse mortgages, refinances, and has a residential department that can help you sell or buy a home. Additionally, AAG offers proprietary jumbo loan reverse mortgages in which you can access up to $4 million in equity, and mortgage insurance isn’t required.
The website is informational and goes into details about the company's loan products and provides tips, retirement advice, and a reverse loan calculator. You can request a free info kit about reverse mortgages or speak to a loan advisor. In order to qualify for a reverse mortgage, borrowers must undergo a financial assessment and complete a loan counseling course.
Best for Long-Term Loans: Quontic Bank
Why We Chose It: Quontic offers long-term loans with flexible terms and banking services nationwide.
Strong industry reputation
Also offers traditional banking services
Additional products offered such as FHA and VA loans
Only one type of reverse mortgage
Limited physical branches
Quontic Bank was founded in 2009 in Great Neck, New York, and is headquartered in New York City. The company offers banking services such as Bitcoin rewards checking accounts, high-yield savings accounts, and money market accounts. It also provides mortgages for investors and owner-occupants, as well as VA loans and commercial loans.
Quontic's reverse mortgage is a long-term home equity conversion mortgage that requires the borrower to participate in a consumer information session given by a HUD-approved counselor. Loans are available nationwide with no servicing fees but there are closing costs, which include private mortgage insurance and title, appraisal, and origination fees. Loans generally fund within 30 to 45 days and you can choose from a lump sum payment, monthly reimbursements, a line of credit, or a combination.
Best for Purchasing a Home: Finance of America Reverse
Why We Chose It: The company offers a program specifically for seniors who want to move into a new home. There’s no minimum credit score and closing costs can be rolled into the loan.
You can get a reverse mortgage to downsize or move to another area
No minimum credit score is required
Price match guarantee
Some mortgage products are only available in 26 states
Servicing fees are charged on some loans
Finance of America Reverse focuses on educating its clients on how reverse mortgages can help them manage their retirement income and spending. The company was founded in 2003 and lends in all 50 states and Puerto Rico, although some mortgage products are only available in 26 states. The website has some interesting tools such as a quiz to find out your retirement type, a home equity calculator, and a custom home-sharing program called silver nest.
The company offers a program for seniors who want to move out of their current home and purchase another one because they need to downsize, be closer to family, or want less maintenance. This program is called Home Safe and it allows homeowners to use up to $4 million of equity in their current home to purchase another one.
In addition to this program, there are typical reverse mortgages where you can stay in your home and receive a lump sum, a line of credit, or term payments. The company offers a price match guarantee and most of the closing costs can be rolled into the loan so you will have less to pay upfront.
The best reverse mortgage companies all have different things to offer. Some maintain physical branches and others conduct business online. Some offer one type of reverse mortgage and others have multiple options. All are good contenders. However, we recommend checking out Reverse Mortgage Funding first when you’re looking for a reputable reverse mortgage lender. The company lends in 49 states, is led by industry veterans, and has multiple mortgage products.
Frequently Asked Questions
What Is a Reverse Mortgage?
A reverse mortgage is a home-secured loan for older people that allows you to use some of the equity in your home. You can choose how you receive the money from a variety of methods.
These loans have flexible repayment terms and you can choose to either make payments or none at all. The balance of the loan will be due when the home is sold, when the borrower dies, or when the borrower moves out. Keep in mind that you’re still responsible for making homeowners insurance and property tax payments.
Who Is a Reverse Mortgage Right For?
A reverse mortgage is typically right for those who:
- Are homeowners aged 62 and over
- Have paid off all or most of their current mortgage
- Need money to supplement their income or funds to pay for healthcare expenses
- Can't qualify for a home equity line
- Need equity but don’t want to sell their home
- Want to move into a new home and use a reverse mortgage for the purchase
Does a Reverse Mortgage Affect Your Social Security or Medicare Benefits?
If you choose to get a reverse mortgage on your home and receive cash from the mortgage, that decision won’t affect your social security or medicare benefits or your eligibility for them.
How We Chose the Best Reverse Mortgage Companies
We researched eight different reverse mortgage companies before deciding on the top options. We chose companies that are reputable with positive overall reviews and compared interest rates (when available), upfront costs, and eligibility requirements. We also considered the types of mortgage products that are available as well as the states the companies lend in.