A reverse mortgage can add stability to your retirement years when used correctly, and selecting the right reverse mortgage company to originate your loan is essential. We created this guide to provide insight into how HECM lenders are rated and how reviews are collected across the web (independent and sponsored review sites).
We want to make things easier for you. That’s why we have compiled a list of the top 20 reverse mortgage companies nationwide. What’s more, we have included 5 essential tips for choosing the right reverse mortgage lender in this guide.
These tips will help you pick the right reverse mortgage lender that meets your financial needs and goals.
National Rankings of Top 20 Reverse Mortgage Lenders
|Years in Business
|Good Review %
|All Reverse Mortgage, Inc. (ARLO)
|Advisors Mortgage Group
|American Advisors Group (AAG)
|American Pacific Mortgage
|Fairway Independent Mortgage
|Finance of America Reverse LLC (FAR)
|GoodLife Home Loans
|Guild Mortgage Company (Formerly Cherry Creek LLC)
|Liberty Home Equity Solutions Inc.
|Longbridge Financial LLC
|Mid America Mortgage Inc.
|Movement Mortgage, LLC
|Mutual of Omaha Mortgage
|Open Mortgage LLC
|Plaza Home Mortgage Inc
|Smartfi Home Loans
|South River Mortgage, LLC
Breakdown of the information presented in the chart:
Company: Names of the top 20 reverse mortgage lending companies.
Rating: Better Business Bureau (BBB) rating, which ranges from A+ (highest) to F (lowest). Most companies have an A+ rating, indicating high standards of business practices.
Years in Business: This column shows the years each company has been operating. It ranges from 4 years to 64 years, indicating both new and well-established companies.
Stars (0-5): This is the average customer rating for each company on a scale from 0 to 5. Ratings vary significantly, with some companies having nearly perfect scores and others as low as 1.0/5.
Good Review %: Indicates the percentage of positive reviews each company has received. This percentage varies widely, from as low as 20% to as high as 99%.
Complaints: The number of complaints filed against each company. The range is from 0 to 109, showing a varied customer satisfaction level.
BBB Review: Links to the BBB reviews of each company, offering a source for more detailed information on customer experiences.
5 Essential Tips for Choosing the Right Reverse Mortgage Lender
1. Choose a Lender Who Has Your Best Interests at Heart
When getting a reverse mortgage, working with a lender who really cares about you is important. Sometimes, we focus too much on one small thing, like a fee that’s a bit cheaper, and miss the bigger picture.
For example, you might choose a lender because they have a lower appraisal fee, saving you $100. But, this same lender might offer you less money overall or have a higher interest rate. This could mean getting thousands of dollars less or paying a lot more in interest over time.
It’s important to look at everything involved in the reverse mortgage, not just one small part. Ensure you understand all the details to make the best choice for yourself.
2. Be Careful with Online Reviews
Reading what other customers say about reverse mortgage lenders online is a good idea. But be cautious about where these reviews come from. Some websites that help find customers for these companies might not have honest reviews, as money can influence them.
Instead, look for reviews on reliable sites like the Better Business Bureau (BBB) or Google Ratings. Real customers write reviews on these sites and can’t be changed by the lenders.
Pay attention to any issues that keep coming up in the reviews. If you see the same problems mentioned over and over, it’s best to avoid those lenders. Remember, this loan is for your benefit, not the lender’s. The best reverse mortgage for you is one that fits your specific situation.
What works for some might not be right for you. At All Reverse Mortgage, Inc., our goal is to give you all the information you need to make a choice that truly fits your needs rather than just selling you a loan.
3. Look at All Loan Details, Especially Lender Margin and Closing Costs
When considering a reverse mortgage, it’s important to compare all the parts of the loan, not just the fees. By law, lenders can’t add extra charges to 3rd party fees such as appraisals, title fees, and credit reports. Lenders can only charge what those services actually cost.
One thing you should really pay attention to is the lender margin. A higher lender margin means you could end up paying a lot more in interest over the years. It also means you might get less money from the loan to start with.
Here’s something else to consider: the Upfront Mortgage Insurance Premium (UFMIP) is usually 2.0% of your home’s value, up to a maximum home value of $1,149,825. So, the highest UFMIP could be as much as $21,786. Some loan options might let the lender cover some or all of this cost for you, which can save you money upfront.
That’s why it’s important to compare different loans and see which is the best for your situation. Don’t just look at the fees; consider how the loan’s terms could affect how much money you get and how much interest you’ll pay over time.
4. Make Sure Your Lender is Approved by HUD
It’s very important to check that the company providing you with a reverse mortgage is approved by HUD (the U.S. Department of Housing and Urban Development). You can visit HUD’s website and use their Lender List Search to do this.
Here’s how to do it:
Type in your lender’s name. Before you search, make sure to check the box that says “Reverse Mortgages through FHA’s Home Equity Conversion Mortgages (HECM).” This will help you determine if your lender is officially approved to offer reverse mortgages. It’s a simple step, but it’s a very important one to make sure your reverse mortgage originator is HUD-approved.
5. Be Careful with Companies Having Their Own Appraisal Services
It’s important to avoid companies that use their own appraisal services. Our company does not use Appraisal Management Companies (AMCs) owned by just one lender.
Here’s why this matters:
- Avoid Being Locked In: Some lenders have their own AMCs and don’t share their appraisals with other lenders. This can trap you with your original lender. If you find a better deal with another lender later on, you might be unable to switch because the AMC won’t transfer the appraisal.
- Limited Choices: This situation can leave you with two not-so-great choices. You might have to pay for a new appraisal (and wait for the original one to expire) or stick with your original lender, even if another offers a much better deal.
To avoid these problems:
- Do Your Research: Before starting, get detailed quotes and compare them.
- Check Credentials: Make sure the loan officer and the company are properly qualified.
You don’t want to find out too late that you could have had a better deal, but now you’re stuck because the lender won’t let you transfer your appraisal to another company.
What banks do reverse mortgages?
Who is the highest-rated reverse mortgage company?
Does HUD offer reverse mortgages?
Are all reverse mortgage companies the same?
How do I know I’m getting the best reverse mortgage?
How do reverse mortgage lenders determine the interest rates?
Who lends the actual money on a reverse mortgage?
Which reverse mortgage companies have the lowest closing costs?
Can a reverse mortgage lender change without the homeowner’s knowledge?
Can a lender lower the borrower’s benefit amount after the loan closes?
Summary: Choosing the Right Reverse Mortgage Lender
Reverse mortgage lenders use different ways to reach out to you, like TV ads, the Internet, direct mail, and financial planners.
Here’s how to make a wise choice:
- Look at Independent Reviews and Offers: Don’t just go by ads. Check independent reviews and compare offers. Lenders set their interest rates and fees, which the government doesn’t control.
- Choose HUD-Approved Lenders: These lenders are usually direct lenders, which can save you time and money. Working with a broker, who acts as a middleman, might lead to higher costs for your reverse mortgage.
- Check for NRMLA Membership: Ensure the lender is a National Reverse Mortgage Lenders Association (NRMLA) member and follows its code of ethics.
- Avoid High-Pressure Sales: Be careful of lenders who try to pressure you into making quick decisions.
- Get Independent Counseling: It’s required for all reverse mortgages. Counseling helps you understand your options and make sure a reverse mortgage is right for you.
Remember, it’s important to review everything carefully and consider other options before you make your final decision.
Inactive companies (Info for past customers)
ARLO recommends these helpful resources: