Compare Reverse Mortgages
How we Compare Reverse Mortgages
Reverse mortgages were first offered by the federal government in 1988, so they are a relatively new financial product. Be that as it may, there are plenty of national and local banks who offer reverse mortgages, as well entirely online entities and aggregator websites, which offer multiple quotes from various lenders. When judging a given company’s reputation we look at the following factors:
Years In Operation
Equal Housing Lender
Closing Costs/Continuing Fees
Every reverse mortgage has two fees associated, which help the FHA insure the loan. Initial mortgage insurance premium, or IMIP, is a one-time fee that goes to the FHA upon origination. Also, a 1.5% mortgage insurance fee is charged annually.
Beyond this, fees private banks and online portals can tack onto this fluctuate wildly. Much of the bad reputation the reverse mortgage market gets is because of this. And since most all extra fees don’t have to be paid out of pocket and can simply be rolled into the balance of the loan, it is easy for unscrupulous lenders to take advantage of unwary seniors and nickel and dime them to death with excessive or ongoing fees.
With all HECMs you must pay the two FHA-related insurance fees, and the fee for your third-party counseling session (usually $125). We rate companies in this category by the reasonableness of their associated fees after these three.
- Origination Fee
- Servicing Fee
- Mortgage Insurance
- Closing Costs
- Appraisal Fee
- Title Insurance
- Credit reports
Here we assess the options a given lender offers for their reverse mortgages. It is also important to note that all reverse mortgage lenders have different rate and closing cost structures depending on their disbursement options. Where one might offer the best rates for monthly payments, another may offer the best rates and fees for a lump sum payout. We recommend comparing multiple companies and asking as many questions as you can to get the full story on rates and any one time or continuous fees (see below) associated with your preferred disbursement options.
Lump sum in cash at settlement
Line of credit (similar to a home equity line of credit)
Some combination of the above
Here we rate how much informational and customer support a given reverse mortgage lender gives its potential clients.
Rev Mtg Calculator
Print Information if requested
Online Chat Support
Types of Reverse Mortgages
There are two types of reverse mortgages that are not federally insured.
Single Purpose Reverse Mortgage: A single purpose reverse mortgage is usually offered by a non-profit or government agency to seniors of low income. These differ from a home equity loan as they can only be used expressly for the purpose stated. Also, since they are not federally insured the loan has to be covered in the event the home’s ownership changes, the borrower moves to a different primary residence, or the borrower passes away.
Proprietary Reverse Mortgage: A proprietary is an uninsured, unregulated reverse mortgage offered by a private bank. Sometimes called “jumbo” reverse mortgages, these are typically for higher value properties that exceed the HECM limit of $625,500.
For our purposes, we will be featuring companies that provide the different types of federally insured HECMs, and also some that feature jumbo reverse mortgages:
-HECM for Purchase
-Proprietary Reverse Mortgage
Full Reverse Mortgages Comparison
|Company Reputation||Closing Costs/Continuing Fees||Disbursement Options||Support Resources||Types of Reverse Mortgages|
|American Advisors Group Reverse Mortgage||9.5||10.0||10.0||10.0||9.0|
|LendingTree Reverse Mortgage||9.0||10.0||10.0||10.0||9.0|
|All Reverse Mortgage||9.0||9.7||10.0||9.8||10.0|
|Reverse Mortgage Expert||9.5||10.0||10.0||10.0||7.5|
|Finance of America Reverse||9.0||10.0||10.0||9.4||9.0|
|Reverse Mortgage Advisors of America||9.2||10.0||10.0||9.0||9.0|
|Good Day Reverse Mortgage||9.0||10.0||10.0||10.0||7.0|
|Reverse Mortgage Educator||9.0||10.0||9.0||10.0||7.0|
|Home Point Financial Reverse Mortgage||8.0||10.0||10.0||10.0||7.0|
|Live Well Financial Reverse Mortgage||8.0||9.0||10.0||10.0||7.0|
|Reverse Mortgage Funding||9.0||7.0||10.0||10.0||8.0|
|Liberty Reverse Mortgage||8.0||8.0||10.0||10.0||7.0|
|NewDay USA Reverse Mortgage||7.0||9.0||10.0||8.0||7.0|
|Proficio Mortgage Reverse Mortgage||6.0||8.0||10.0||10.0||7.0|