Best reverse mortgage companies, plus expert insights into how the loans work

In today’s shifting economic climate, marked by persistent inflation, high rates and other challenges, many Americans are seeking additional income sources to alleviate the financial pressures they’re facing. For senior homeowners, one viable option is a reverse mortgage, which is a unique type of mortgage that allows individuals aged 62 or older to convert a portion of their home equity into cash. 

This financial tool can be especially useful for senior homeowners, as it offers flexibility in disbursement, including lump-sum payments, lines of credit or monthly installments. Repayment is typically managed through the sale of the home by the borrower or their heirs — meaning that the borrower doesn’t have to repay what’s owed until they sell their home or die. That alleviates some of the pressure that borrowing money would otherwise place on their budgets.

If you’re considering a reverse mortgage, though, it’s essential to evaluate various lenders to find the best fit for your needs. To help you explore your options, we’ve broken down the best reverse mortgage companies into several categories, outlined below.

Explore your reverse mortgage options here to see how much you’re eligible to withdraw.

Here are our picks for the best reverse mortgage companies, broken down into five categories.

Best overall: Fairway Independent Mortgage

Fairway Independent Mortgage Company stands out for its extensive network of local offices, providing personalized, in-person support. The company boasts strong customer reviews and maintains an A+ rating with the Better Business Bureau (BBB). Fairway offers multiple disbursement options, including lump-sum payouts, fixed monthly payments or lines of credit, adding flexibility to the mix. Homeowners with at least 50% equity in their home may qualify for a reverse mortgage through Fairway.

Learn more here.

Best for low interest rates: Longbridge

Longbridge Financial is recognized for offering some of the lowest interest rates in the reverse mortgage sector. The company provides various products, including the Longbridge Platinum, which lowers the age requirement to 55 for eligible borrowers. Longbridge also offers the HECM for Purchase reverse mortgage, enabling seniors to buy a new primary residence while reducing out-of-pocket expenses. Their website features comprehensive resources, including a reverse mortgage calculator and a detailed FAQ section.

Learn more here.

Best for customer service: Finance of America

Finance of America Reverse offers a diverse range of reverse mortgage products tailored to meet various financial needs. The lender pairs an A+ BBB rating rating with a high TrustPilot rating, reflecting strong customer satisfaction. Their website provides an informative blog, a mortgage calculator and an extensive FAQ page to assist borrowers in making informed decisions.

Best reviewed: Finance of America

Finance of America is a top reverse loan originator and for good reason. They deliver for their customers, who love to share their experiences. The company boasts over 7,000 combined reviews on Trustpilot and Better Business Bureau and has a 4.7 rating on Trustpilot.

Finance of America allows you to receive your funds in numerous ways, including a lump sum payment or line of credit. You can use the money to pay off your mortgage—a loan requirement—or for in-home care, home improvements or to help make ends meet.

Learn more here.

What is a reverse mortgage?

A reverse mortgage is a specialized loan product designed for homeowners aged 62 and older that allows them to convert a portion of their home equity into cash without selling the property or taking on monthly mortgage payments. Unlike a traditional mortgage, a reverse mortgage pays the homeowner, effectively “reversing” the typical mortgage relationship. This financial tool is primarily intended to help seniors supplement retirement income, cover healthcare expenses or fund home improvements while remaining in their homes.

“Some seniors believed that Social Security income would be enough to live off in their golden years and didn’t prepare financially for retirement,” Michelle White, a mortgage expert at The CE Shop, says. “They did, however, keep their homes, hoping to pass them on to their children. The equity they built can supplement any other income they receive, making their senior years more affordable.”

The most common type of reverse mortgage is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA). There are also proprietary reverse mortgages offered by private lenders and single-purpose reverse mortgages granted by state and local government agencies or non-profit organizations for specific purposes. 

How do reverse mortgages work?

Reverse mortgages operate by allowing homeowners to borrow against the equity they’ve built in their property, receiving funds without immediately repaying the loan. When setting up a reverse mortgage, borrowers have several disbursement options: a lump sum payment, a line of credit to draw from as needed, fixed monthly payments or a combination of these methods. 

Throughout the life of a reverse mortgage, interest accrues on the amount borrowed and is added to the loan balance. This means the debt increases over time rather than decreases as with a traditional mortgage. The interest rate can be fixed or variable depending on the loan program and the borrower’s preference. Reverse mortgages also come with various fees such as origination fees, mortgage insurance premiums (for HECM loans) and closing costs, which are typically financed as part of the loan rather than paid out-of-pocket.

It’s important to understand that with a reverse mortgage, the borrower retains title to the home and remains responsible for property taxes, homeowners insurance, and maintenance. The loan becomes due when the last surviving borrower moves out of the home permanently, sells the property or dies. At that point, the loan balance, including accrued interest and fees, must be repaid, typically through the sale of the home.

What are the pros and cons of reverse mortgages?

Reverse mortgages provide seniors with financial flexibility by allowing them to tap into home equity without selling their property, and one major advantage is that borrowers face no monthly mortgage payments, which can reduce financial stress for those on fixed incomes. “There is never a required monthly principal or interest payment,” says Steve Resch, vice president of retirement strategies at Finance of America Reverse. 

The non-recourse feature of these loans ensures that neither the borrower nor their heirs will ever owe more than the home’s value, providing important protection against declining real estate markets.

Another benefit is the versatile payment options, which can be customized to match the borrower’s financial requirements. For instance, a line of credit option grows over time if unused, potentially increasing available funds for future needs. Reverse mortgage borrowers maintain homeownership and can stay in their familiar environments and communities, which supports emotional well-being and stability in later years. 

That said, there are some drawbacks, including the origination fees, mortgage insurance premiums and closing costs, which can substantially reduce the equity available to borrowers. Plus, the interest rates on reverse mortgages are typically higher than traditional mortgages, and because interest compounds over time on an increasing loan balance, the debt can grow rapidly, potentially consuming most or all of the home’s equity over time.

Reverse mortgages can also complicate estate planning, as heirs may have limited options when the loan becomes due. They must either repay the loan to keep the property, sell the home to satisfy the debt or relinquish the property to the lender. 

What are the requirements for a reverse mortgage?

The primary eligibility requirement for a reverse mortgage is age. At least one borrower must be 62 years or older for HECM loans, though some proprietary reverse mortgages may have different age thresholds. Applicants must own their home outright or have a substantial equity position, typically at least 50% of the home’s value. The property itself must be the borrower’s primary residence, meaning they live there the majority of the year, and it must meet FHA property standards and requirements, which may necessitate repairs before loan approval.

Financial eligibility criteria have tightened in recent years. Lenders now conduct a financial assessment to verify that borrowers have sufficient income or assets to continue paying property taxes, homeowners insurance, and maintenance costs. This evaluation includes a credit history review and analysis of income sources. If the financial assessment raises concerns, lenders may require a “set-aside,” which is a portion of reverse mortgage proceeds reserved specifically for paying these ongoing obligations.

Before finalizing a reverse mortgage, applicants must complete a counseling session with a HUD-approved counselor. This educational session helps borrowers understand the costs, implications and alternatives to reverse mortgages, ensurig that seniors are making fully informed decisions about whether a reverse mortgage aligns with their financial goals and circumstances.

The bottom line

Getting a reverse mortgage can help you access the cash you need, but it’s not without risk. If you don’t live in your home as your primary residence, fail to upkeep it or fall behind on required costs like property taxes or HOA insurance, the lender could foreclose on your home. And you should be cognizant of any reverse mortgage red flags, particularly when your home is at stake.

If you want to learn more, you can speak with your current bank or credit union or get quotes from the above lenders. Comparing several reverse mortgage loan options can help you identify which one best addresses your short-term and long-term needs.

Tim Maxwell contributed to this report.