The best reverse mortgages are affordable, easy to obtain, and help you to achieve your financial goals. With numerous lenders offering reverse mortgages, it is critical for borrowers to compare options carefully.
Reverse Mortgage Lenders
The following lenders offer reverse mortgages and are considered among the best, but this is not an all-inclusive list. Most borrowers should consider several companies before choosing a lender.
- All Reverse Mortgage Company is a national lender that is highly competitive and will match or beat any other bank offer available. The company also has numerous positive testimonies from borrowers and a high rank at the Better Business Bureau. It offers both adjustable and fixed rates and has numerous lending options.
- Wells Fargo's reverse mortgage loans offer flexible qualification guidelines, competitive rates, and several payment disbursement options. It offers both variable and fixed rate loans and offers FHA-backed reverse mortgage loans, which may mean lowering interest rates for borrowers.
In addition to these lenders, many seniors will qualify for FHA-reduced interest rate loans. These reverse mortgage loans are among the best available because they have lower interest rates, reduced closing costs, and better terms overall. The FHA does not provide these loans specifically, but rather works through local and national lenders through FHA-approved status. You can find a list of these lenders at the FHA website.
The FHA HECM Saver program is also an important option to consider. It is a second reverse mortgage option that can help to reduce closing costs for those homeowners who wish to borrow a smaller amount than the standard reverse mortgage loan.
Another resource for finding trusted providers is the National Reverse Mortgage Lenders Association. This organization ensures the member lenders are licensed and that they adhere to a specific code of conduct. You can visit the NRMLA website to locate local lenders that fit these qualifications.
About Reverse Mortgages
A reverse mortgage is a type of home loan that allows the homeowner to convert a portion of the equity in the home into cash. What makes this particular loan unique is that there is no repayment of the loan. Rather, the lender makes a payment to you each month, quarter, annually, or in a lump sum. You can use those funds for anything you would like. However, once you no longer use the home as your primary residence, you must pay off the loan or allow the lender to take control of the property.
The best reverse mortgages give you flexibility and options. Some features to pay special attention to include the following:
- The term options, which may include a fixed monthly cash advance, a credit line, or a combination of payouts for a specific time or for as long as you live in your home.
- Origination fees are often in place. In addition, you are likely to pay mortgage insurance premiums and closing costs but some companies charge less than others.
- Interest charges range widely from one lender to the next. The amount you owe on your reverse mortgage will grow over time, based on the amount paid out and the interest rate charged. Look for the lowest rate possible.
- Fixed and variable rate loans may be available.
It is also important for reverse home loan borrowers to know the terms of the loan. Specifically, learn all of the conditions that could make the loan payable and due. You also want to ensure you understand all aspects of the Total Annual Loan Cost rates schedule provided to you as part of this loan package, which shows the projected annual average cost of having this type of loan.