Your journey to getting a reverse mortgage is easy when you find, know, and understand the best reverse mortgage companies. This article is for those who are looking to know the best reverse mortgage company.
Here we will examine the details of the top 5 best reverse mortgage companies, their pros, and cons as well as other information surrounding the topic of the best reverse mortgage company. Don’t forget to read the last paragraph as it gives you very important information.
If you are getting aged or you are already at your retirement age. You may want a means to pay off your mortgages and a need for supplementary income for other expenses.
This is where you need a reverse mortgage. Here in this article, we are going to examine the 5 best reverse mortgage companies. However, let us first understand the concept of a reverse mortgage.
What Is A Reverse Mortgage?
A reverse mortgage is a financial agreement that allows you to turn the equity built up in your home into cash that you can go to for support. The reverse mortgage is squarely aimed at helping you with income during retirement.
There are best reverse mortgage companies that help to make the process stress free. We would see them in the course of this learning but first, how does a reverse mortgage work?
How Does A Reverse Mortgage Work?
Here is how the reverse mortgage works. It is typically involved with paying a lender to buy your home over time while you live in it. It converts part of your home’s equity and gives you payment in return.
In other words, in reverse mortgages, the borrower uses the home as a security or collateral to borrow or get income over time.
What Are The Types Of Reverse Mortgage?
It is pertinent to get familiar with the types of reverse mortgages. This is because even with the knowledge of the best reverse mortgage company, your journey through reverse mortgage might not be straight if you do not know the types. The types of reverse mortgages are enumerated in the paragraphs below.
Home Equity Conversion Mortgage (HECM).
In this type of mortgage, the US government insures loans through the Federal Housing Administration(FHA) and HUD. And the FDA assumes most of the losses if the mortgage grows above the house value.
Proprietary Reverse Mortgage
Still, on the 5 best reverse mortgage companies, let’s the second type of reverse mortgage. A proprietary reverse mortgage is good for people with high-value property. It is similar to the first. However, it does not have the guarantee of the government.
Single Proprietary Reverse Mortgage
This is the last type of reverse mortgage to know before you search for the best reverse mortgage company.
In this type, the lender gives restrictions on how you would use the money from the reverse mortgage. This type of mortgage is not expensive but not easily available.
Who Is Eligible For A Reverse Mortgage?
Let’s quickly answer the question of eligibility before seeing the 5 Best Reverse Mortgage Companies. Before you get a reverse mortgage;
- You must be at least 62 years old, with a few exceptions.
- Your home must either be paid off or have a very low mortgage balance.
- The property must be your residence.
- Must have no delinquent federal debts.
- Must be able to afford future federal housing costs.
These are some of the requirements but there may be variance in some cases.
Top 5 Best Reverse Mortgage Companies
Now let’s see the best reverse mortgage companies. Note that this result is based on their cost, coverage, customer services, reliability, and much more. Therefore they are not exclusive but suggestive. The 5 best reverse mortgage companies are:
American Advisors Group (AAG)
This is the first on our list of the best reverse mortgage companies. It was founded in 2004 and has offices in California, Hawaii, New York, and many other states. It is most reputable for its good customer service and availability of online calculators.
The calculator helps you to estimate what you are qualified for. It does not charge a mortgage fee throughout the life of the loan. And you could loan up to $4million. However, its fees add up quickly.
Established in New York in 2007, the Quontic Bank comes second on the list of the 5 best reverse mortgage companies. It is most notable for its long loan terms. It has both mobile and online banking to help you monitor and manage your loans as well as excellent customer service.
It does not charge monthly fees and has a closing cost that totals between $6000 and $8000. You pay an annual PMI of 0.5% of the remaining balance. However, its branches are limited and it only offers HECM loans.
Liberty Reverse Mortgage
Liberty Reverse Mortgage comes third on our list of the 5 best reverse mortgage companies. They are best for good credits. This is because they offer flexible terms with a price match.
They are available in most states, have free online resource partners, and give detailed information on their website. However, they have rigid eligibility requirements.
Reverse Mortgage Funding
This reverse mortgage company is best known for its ease of qualification. This is because it accepts non-FHA-approved condos and has propriety reverse mortgage products.
They also offer educational resources and give $1000 gift cards to borrowers. Also, it accepts borrowers as young as 55 years in some states. Its loan offer is however limited.
Finance Of America Reverse
This mortgage company is best for the purchase of a new house or condo. It offers a competitive fixed interest rate and loans up to $4million.
Whoever wants to combine the benefits of a reverse mortgage with buying a new house should consider FAR. Its con however is that the proprietary products are only in 26 states.
Is Reverse Mortgage Good? -Benefits Of A Reverse Mortgage.
Some of the benefits of a reverse mortgage are
- It helps to turn your assets into cash to see you through retirement.
- The funds from reverse mortgages are not taxed.
- It protects you even when the value of your home falls
- It helps to maintain ownership of your home.
What Are The Cons Of A Reverse Mortgage?
- It could affect your other need-based government programs
- It is not free because you are required to pay an upfront insurance premium, origination fee, and more.
- It eats up your home equity that there may not be any left when your heirs want to pay off the debts.
How Much Can You Borrow From Reverse Mortgage Companies?
When you take up a reverse mortgage, the company (any of the 5 best reverse mortgage companies) will let you borrow a percentage of your home equity.
Although it might vary slightly, a reverse mortgage company can allow you to borrow up to 60% of your home equity.
How To Find The Best Reverse Mortgage Company Near Me.
You can find the best reverse mortgage company near you in three ways.
Ask your family and friends. They are available to help you make inquiries and get the best options.
The second way to find the best reverse mortgage company near you is to type your location on an internet search engine. A list of the best mortgage companies around you will surface. Also, you can find them by reading articles such as this on the internet.
This article has comprehensively divulged the topic of the best reverse mortgage companies. 5 companies and their features were explained. The article also provided accurate answers to the best reverse mortgage companies.