Comprehensive Finance of America Reverse Review
If you’re looking for a reverse mortgage, it’s probably because you need extra funds to pay for something like a home repair, medical bills or to pay off debt from a mortgage or credit cards. Maybe a financial advisor told you it would be a good part of your retirement planning. Whether your case is needing a lump sum of cash, tenure payments, a line of credit or some combination of each, a reverse mortgage from Finance of America Reverse could be the right choice for you.
Most (95%) of Finance of America Reverse’s loans are federally insured Home Equity Conversion Mortgages (HECM), meaning they have built-in protections for the borrower. From that perspective, Finance of America Reverse offers a product similar to their competition.
But what makes this company stand out from other reverse mortgage companies is its customer service.
- Customer service
- 30 day typical closing time
- Jumbo loan option
- Licensed in 50 states and Puerto Rico
- Limited use of technology
Finance of America Reverse Customer Service
Any HECM reverse mortgage requires borrowers to complete a free, compulsory consultation with a Housing and Urban Development (HUD) counselor. Nevertheless, a reverse mortgage can be difficult to understand. What we appreciate about Finance of America Reverse is their willingness to go above and beyond to make sure you understand the nuances of getting a reverse mortgage. Their licensed professionals have ample experience in their field and can talk with you through the process and answer any questions you might have.
Moreover, this is not a one-size-fits-all operation. The company will work with you to tailor your reverse mortgage to your specific needs. That means if you prefer to receive a significant portion of the funds up front, they will work with you to structure a lump sum. If you prefer to supplement your retirement income with additional line of credit payments, they will work with you to that end. They can also create a hybrid approach, such as a lump sum with a line of credit. While there are federally required limitations to the distribution of your funds, the team will work with you to any extent possible to reach your retirement planning goals.
Finance of America Reverse Products
The HECM reverse mortgage product is the most popular reverse mortgage product on the market because of its federally insured non-recourse feature. In simple language, that means neither the borrower or the heirs will owe more than the home is worth at the time it is sold. Accordingly, HECM loans are the most popular reverse mortgage product at Finance of America Reverse. The company’s headquarters are in Tulsa, OK, but this product is available in all 50 states and in Puerto Rico. The HECM reverse mortgage is subject to a principal limit of $636,150, or the value of the home (whichever is less).
For borrowers that need a reverse mortgage product on a home beyond the HECM limit of $636,150, FAR offers a proprietary jumbo loan called the HomeSafe reverse mortgage. This product often appeals to high net worth individuals, and will allow borrowers to access loan amounts of up to $2.25 million. Technically the HomeSafe product is also a home equity conversion mortgage (HECM), but for the purpose of this guide HECM will refer only to the FHA-insured product and not the HomeSafe loan.
|Loan Value||Less than $636,150||$636,151 – $2.5M|
|Interest Rate Type(s)||Fixed or Variable||Fixed|
|Line of Credit||Optional||N/A||Tenure Payments||Optional||N/A|
Unlike the HECM product, Finance of America Reverse’s HomeSafe product is not federally insured, but remains a non-recourse loan. As a benefit, the borrower doesn’t have to pay mortgage insurance premiums, which makes the total cost of the loan smaller than it would if it included mortgage insurance premiums. But, in the event the loan balance exceeds the value of the home after it is sold, the borrower or the heirs will be responsible for the difference.
Closing speed at Finance of America is typically 30 days, but could take longer depending on the borrower and the underwriting process.
While the mortgage industry, in general, is moving toward the future with completely online applications and other mortgage services, Finance of America Reverse is more traditional than some lenders. For instance, they still rely on using mail for parts of the application process. As a good first step, it seems the company is trying to incorporate some technology to simplify the process by offering e-signings on specific documents.
Finance of America Reverse Costs
Like other mortgages and reverse mortgages, there will be various costs for Finance of America Reverse borrowers. Closing costs will include origination fees and various other fees like title insurance or settlement fees.
Although Finance of America Reverse does charge an origination fee, notably, these costs are not always paid upfront or out of pocket by the borrower. Depending on your situation, you may be able to close the loan without any out-of-pocket fees. Finance of America Reverse charges between $2,500 and $6,000 for origination fees. Mortgage insurance premiums will vary, depending on the value of the home. The other various fees (title insurance, etc.) are commonly charged in the industry.
Interest on the Finance of America Reverse mortgage can be either fixed rate or variable rate – depending on the borrower’s preferences. Your decision for interest type (fixed vs. variable rate) will have an impact on the timing and amount of the funds you receive. There are advantages and disadvantages to each option, so you should consult with your financial advisor or a loan officer at Finance of America Reverse for answers on which interest type is best for you.
Eligibility for a Reverse Mortgage at Finance of America Reverse
While the loan is secured by the home, there are some general requirements for a reverse mortgage that apply at Finance of America Reverse. First, the borrower must be at least 62 years old. Second, they must own the home and use it a primary residence. While they do not have specific credit score requirements for borrowers, applicants need to pass a financial assessment in order to receive a loan. The financial assessment looks at credit history, property tax history, monthly residual income and other financial metrics as needed.
What consumers say about Finance of America Reverse
Reading reviews from Finance of America Customers on ConsumerAffairs, you’ll frequently see words like “knowledgeable” and “helpful,” even “fabulous.” The average rating for the company is 4.6/5.0 stars on a popular review site with more than 1,000 consumer reviews. Criticisms about the company from unhappy customers were about unexpected closing times or limits to the amount of reverse mortgage funds available.
What exactly is the entire process of getting a reverse mortgage at Finance of America Reverse?
Once you’ve decided to contact Finance of America Reverse about a reverse mortgage, there are five steps that will happen before you can finalize the reverse mortgage and gain access to funds. This process typically takes about 30 days:
After receiving your contact information, the company will contact you to assess your needs, your situation and answer your initial questions. If you are still interested in moving forward, they will prepare you for a federally-required independent counseling session.
- Independent Counseling
A HUD (Housing and Urban Development) approved reverse mortgage counselor will contact you to make sure you understand all the aspects of a reverse mortgage. The session typically lasts 60-90 minutes and is conducted either over the phone or face to face. You will receive a certificate demonstrating that you have completed counseling. If you decide to proceed with the loan, you will move to the application phase.
A loan officer from Finance of America Reverse will contact you to begin the formal application. You will work to gather the required documents, which include tax returns, bank statements and identification and your reverse mortgage counseling certificate. A notary will come to your home to collect these documents and your signature.
- Processing approval
A Finance of America Reverse mortgage specialist will work with a vendor to complete a home appraisal and review your application. An underwriter will review all the application materials and determine your eligibility for a loan.
If your application is approved, you will work again with a loan specialist to schedule closing and complete the required paperwork. Once closing has taken place, you’ll have access to your funds.
Finance of America Reverse Product-related Q&A
- Do I need an appraisal on my house?
Yes. You do need a home appraisal. This is part of the processing approval phase of the application process.
- Will I still have to pay my property taxes and/or homeowner’s insurance?
Yes. Finance of America Reverse can set aside part of your reverse mortgage for estimated property taxes and insurance premiums. Talk to your loan officer about the option if you think you’ll need assistance.
- What are their credentials? Are they part of any trade organizations?
The company a registered mortgage company and is NMLS #2285. Finance of America Reverse is part of the National Reverse Mortgage Lenders Association, and is rated A+ by the Better Business Bureau.
- Does Finance of America Reverse have a good business record?
NMLS Consumer Access has only three records related to Finance of America Reverse. One of the records was about the company filing a required report one day late in Oklahoma. The other two records were related to employees operating without proper licensure in Arkansas and Kentucky.
- Does my spouse need to be listed?
No. However, it may be best for you to list your spouse if he/she is eligible. Check out the tips for a wise buyer in our reverse mortgage buyers guide.
- How much equity do I need to have?
You will need some equity to be qualified, but there is no exact answer to this question. Contact a reverse mortgage advisor for a better estimate based on your situation.
- Do I need good credit?
Not necessarily. Finance of America will conduct a financial assessment to determine your eligibility for the reverse mortgage.
- Do I have to be a specific age?
Yes – 62 or older.
Considering the complexity of the reverse mortgage products on the market, it’s important to find a reverse mortgage lender that you can trust. Finance of America Reverse seems to set the standard for knowledge and customer service. If you are interested in one of Finance of America Reverse’s products you can call 844-587-3377 or use their online contact form.