Why All Reverse Mortgage®
• We listen, We Care, We Advise.
Our very first customer was a member of our own family. 15 Years later, we're still as passionate about helping American's age in place and better enjoying their retirement years. If we feel the reverse mortgage is not right for you or your circumstances, we will be the first to tell you.
Compare our independent reviews and ratings to any other lender.
How We're Different
We don't believe you should have to pay for a lender's expensive marketing budget with higher loan costs.
We are the only reverse mortgage lender that offers online quotes including real-time rates and loan terms. Compare our competitive rates and lower costs to any competitor and realize thousands more from your home’s equity!
15 Year History of Excellence
Since we started in 2004, our goal has remained simple: to offer the best terms and unbeatable customer service. We maintain an A+ exemplary rating with a perfect 5-Star Review by the Better Business Bureau.
ARLO™ is HUD Approved by the Federal Housing Administration and proud members of the National Reverse Mortgage Lenders Association. As a member of NRMLA, we abide by the industry the Code of Ethics & Professional Responsibility in which we pledge to serve you with integrity. Your best interest will always be our primary consideration.
Information and Learning Center
If you are new to reverse mortgages, Start Here!
Hi, I'm ARLO and I Love Questions!
What is a Reverse Mortgage?
A reverse mortgage is a loan secured by your home. This type of loan allows borrowers to access a portion of their equity — tax-free — without having to make monthly loan payments. No payment is required until the last surviving homeowner moves, passes away, or decides to sell. The borrower maintains the title of the home and remains responsible for property taxes and homeowner’s insurance payments.
Since 1989, the Home Equity Conversion Mortgage (HECM) has been insured by the federal government through the Federal Housing Administration (FHA), a division of the Department of Housing and Urban Development (HUD). Since its inception, the reverse mortgage program has helped thousands of homeowners just like you to safely access a portion of the equity in their homes to better enjoy their retirement years. The HECM is the most common reverse mortgage type.
What Are the Requirements?
- At least one homeowner must be 62 years of age or older
- You must reside in the home as your primary residence
- Your home must be either a single-family home, two to four-unit owner-occupied home, townhouse, approved condominium unit, or certain manufactured homes
- You must attend an educational HUD-approved counseling session by phone or in person
- You must continue to pay property taxes and homeowners insurance
Get started with our free guides:
How Much Money Can You Receive?
Generally, you can expect to receive 40-60% of your home value depending on your age, program selection and current interest rates.
The amount available to you is based on:
- Youngest borrower’s age
- Today's current interest rate environment
- 2019 HECM lending limit of $726,525, or up to $5,000,000 on select Jumbo Reverse Mortgages.
Reverse Mortgage Payment Options
How will I receive my loan proceeds?
There are several ways borrowers can receive loan proceeds—a choice that may depend on the reason you’re getting a reverse mortgage or the strategy behind it. Here are the options and some considerations.
Payment Option: Line of Credit
The line of credit is the most popular choice among borrowers for receiving their reverse mortgage funds. Here are some considerations:
- You can access funds only when needed, if you so choose.
- If left untouched, the line of credit amount grows over time, which can be a way to maximize your borrowing potential.
- A line of credit can be extremely helpful for borrowers who don’t necessarily need the funds right away but want to have it as a back-up. Explore the line of credit »
Payment Option: Term and Tenure Payments
A term payment gives borrowers fixed payments for a specified amount of time. A tenure payment allows for monthly payments for the life of the loan, even if the payments exceed the home value. Here are some considerations:
Some borrowers use term payments to delay claiming Social Security benefits. Because Social Security benefits increase the longer
you wait to begin receiving them, this is a strategy some borrowers use to maximize their loan.
- For example: If you are 65 and want to defer collecting Social Security until you turn 70 (to increase your Social Security payments), you can establish term payments to augment your income over that 5-year period. The amount you will receive each month in payments is fixed regardless of whether your home value decreases or increases over the next five years.
- Under a tenure payment plan, the only way the payments will stop is if you pass away or leave your home permanently (you need to be sure you always pay taxes and insurance when due so that you are not in default of your loan).
- With both term and tenure payment options, you also have the choice to do a modified term/line of credit plan or a modified tenure/line of credit plan. In both cases, the plans allow you to establish a line of credit and receive fixed monthly payments for either a specified amount of time or for your lifetime in your home.
Payment Option: Lump Sum
A lump sum allows the borrower to take the loan proceeds all at once. Here are some things to consider:
- A lump sum may be beneficial for you if you have a large payment to make, such as
- Home renovations
- Medical payments
- Paying off a large current mortgage in order to eliminate monthly mortgage payments
If you choose a fixed rate to take out the initial lump sum, you do have the option regarding how much of your
home equity you want to tap into, up to your maximum benefit amount.
- For example, a borrower can take out less funds than he or she is qualified to borrow. Say you need some renovations done on your home and you know it will cost around $30,000 but are eligible for an $80,000 loan. You may choose to take the lesser amount in this case.
- If you used the fixed rate loan and borrowed less than the full amount at closing, you’ll need to refinance if you choose down the road to take out more of your home equity. You cannot make subsequent draws on the fixed rate loans.
For Home Purchase
Qualifications may be easier. Borrowers may find that versus purchasing a home with a traditional mortgage, the loan qualification guidelines are easier.
Benefits may be greater. The H4P offers an alternative to paying for the home in cash, while still being able to eliminate monthly mortgage payments.
How it works: The transaction is completed using funds from the sale of your old home, private savings, gift money or other sources of income, which are then combined with the reverse mortgage proceeds.
How it helps: For borrowers who are looking to maximize their buying potential for a new home, or who want to relocate in retirement, this option can help retirees strategically to achieve these goals.
Reverse mortgage loans enable borrowers to utilize different strategies depending on their circumstances and needs. The one that is “right” is the one that is right for you. For more information to help you determine which payment option might work best for your situation, contact us to learn more or visit the following resources:
Current Interest Rates
- Adjustable rates from 3.93%
- Fixed Rate 4.31% (5.76% APR)
Rates as of 4/19/19 Learn all about interest rates and how they affect your available loan and future home equity position at our helpful interest rates page »
Required HUD Counseling
Counseling with a HUD-certified counselor is required of all borrowers. Here’s what you need to know:
- Depending on your location, counseling may take place by phone or in person.
- The role of the counseling agency is to review your unique financial considerations and explore any alternatives that may be available, such as downsizing, city or state grants, or other alternatives.
- Counselors are required to ask potential borrowers about income, assets, debts, and monthly living expenses to perform a budget analysis.
- Once you have completed this session you will be provided a counseling certificate which you will need to sign and deliver to us as part of your loan application.
As a lender we must give you a list of no less than 10 counseling agencies to choose from, five of which are mandated by the FHA and include the National Council on Aging. Only after we receive your application and signed counseling certificate can we begin the processing of your loan. To find a HUD approved counseling agency near you, please visit our counseling resource page »
How is the Loan Repaid?
Reverse Mortgages require no monthly payments for as long as the borrower(s) lives in the home. The loan becomes due and payable when the last borrower on the original loan permanently leaves the property whether because of death, they have permanently moved to an assisted living facility, to live with family for care or when the borrower sells the home. At that time, the loan becomes due and payable and the loan must be repaid.
There are several things that borrowers and heirs of reverse mortgage borrowers should do in anticipation of needing to finalize or payoff a reverse mortgage.
We recommend you take the following steps:
- Procure title in the names of the heirs. This can include adding the names of heirs even before borrowers pass as your reverse mortgage allows you to add additional persons to title if at least one original borrower remains on title.
- Contact a local real estate professional and determine the most probable selling price of the home.
- Compare the value or most probable selling price to the outstanding balance of the loan.
- Determine if you want to refinance the loan or pay it off with other funds available to you or sell the property if there is equity in the home based on the value and most probable selling price (remember, heirs also have the option to pay 95% of the home’s current value if the balance exceeds the value and you still want to keep the home).
The loan is a non-recourse loan and if you do not want to keep the property or sell it, if you decide you want to let the lender take the property back, there is no recourse and the lender cannot look to any other assets to repay the obligation. They can only look to the property to repay the debt.
Also See: Ask ARLO™ / Heirs & Loan Maturity
Is a Reverse Mortgage Right for You?
Reverse Mortgage loans are not right for everyone. It may surprise you to hear a lender say this, but it is true. If you are looking for a short-term loan you may be better suited for a different type of financing. A reverse mortgage loan can sometimes require closing costs, making it impractical as a short-term solution in some cases.
However, for those who wish to remain in their homes and need extra cash flow to do so, the Home Equity Conversion Mortgage may be exactly what you are looking for. Educate yourself or family on the safeguards with our Advantages & Disadvantages .PDF guide. We explain what it is, how it works, and provide answers to many frequently asked questions and common misconceptions.
You can also find current articles in our blog featuring articles, personal advice and industry updates. Our blogger and CEO Michael G. Branson has over 40 years banking experience, has been instrumental in educating some of the largest banks on the nuances of this program and its benefits to older homeowners.