Because of federal rules, most reverse mortgages work about the same way no matter where you get one.
So lenders have to find other ways to distinguish themselves in this market.
Longbridge Financial, LLC, gets attention with its easy-to-use website and online tools and its strong customer service record.
Let’s take a closer look at Longbridge Financial in this reverse mortgage review as you decide whether to partner with this lender.
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Longbridge Financial Company Information
A lot of lenders offer reverse mortgages. Very few exist specifically for the purpose of reverse mortgages.
Longbridge falls into this second category. Founded in 2012 by a group of finance and insurance veterans, Longbridge sought to improve the reverse mortgage experience for seniors entering the marketplace.
To accomplish this, the company’s founders and investors made a commitment to deal with its customers with clarity and transparency.
These kinds of values are difficult to measure. However, we can get a sense of customer satisfaction through sites like the Better Business Bureau, Trustpilot, and ConsumersAdvocate.
All three sources give Longbridge solid marks for consistently providing strong customer service, both for existing customers and potential clients.
Longbridge Financial Reverse Mortgage Products
Most consumers opt for a federally insured reverse mortgage, known as a Home Equity Conversion Mortgage (HECM). So we’ll start there.
HECM Loans From Longbridge
Because the Federal Housing Administration and the U.S. Department of Housing and Urban Development regulate HECMs, Longbridge’s options will look similar to other lenders’ choices:
- Origination Fees: Reverse mortgage lenders tend to charge hefty loan origination fees, and Longbridge is not an exception. Federal laws limit fees to 2 percent of your loan. No matter the size of your loan, though, your lender can charge as much as $2,500 but no more than $6,000.
- Maximum Loan: Also, because of federal laws, a lender such as Longbridge can’t loan more than $675,625 through a HECM, no matter how much equity you have. Longbridge also offers Platinum loans, which can untie up to $4 million in equity; these proprietary loans do not have federal guarantees.
- Age Requirements: You must be at least 62 years old to borrow through a reverse mortgage. If you’re applying with your spouse as a co-applicant, your spouse must also be at least 62.
- Fixed or Adjustable Rates: Longbridge Financial offers both fixed and adjustable-rate reverse mortgages. An adjustable rate may help if you’re planning to pay off the reverse mortgage within a couple of years — before the lower introductory rate expires.
- Mortgage Insurance: Federally backed HECMs require the borrower to pay for mortgage insurance. You’ll pay 2 percent of the loan’s value upfront, followed by an annual premium of 0.5 percent of your balance. Longbridge’s Platinum loans do not need this insurance.
- Closing Costs: As with any mortgage loan, you should be prepared to pay closing costs which include legal fees, appraisals and assessments, escrow fees, and the like.
Many borrowers like to fold most of the above fees and interest charges into the reverse mortgage loan itself.
For example, if you borrowed $300,000 against the equity in your home, you may need to pay $12,000 to $15,000 or so in fees upfront. Rather than paying this out of pocket, you may choose to pay it with funds from your loan.
As a result, your $300,000 would yield only $285,000 to $288,000. Then, each year, your interest charges would be added to this balance.
HECM Payout Options
With Longbridge, you can receive funds from your loan in several different ways:
- Lump-Sum Payment: Access 60 percent of your equity in a single, lump-sum payment. This option helps people who need to pay large expenses such as debts or medical bills.
- Term Payments: Rather than a lump sum, you can set up recurring payments from Longbridge. Retirees who need a steady flow of income usually opt for term payments.
- Line of Credit: You could turn your Longbridge reverse mortgage into something like a home equity line of credit (HELOC) but without the monthly payments.
- A Combination: Longbridge is among a few lenders who allow you to combine the options above. For example, you could get a partial lump-sum payment and use the remaining balance to fund recurring payments or a line of credit.
Additionally, Longbridge offers a “HECM for Purchase” reverse mortgage. This loan can help you use the equity in your current home to make a new real estate purchase. Be sure to plan for closing costs on the new property if you choose this loan.
Longbridge Platinum Reverse Mortgages
I’ve talked a lot about federally backed HECM loans because they’re growing in popularity. High-value homeowners may not like the limits of these loans.
Longbridge offers this client base its Platinum line of proprietary reverse mortgages. Differences between proprietary and HECM loans include:
- No Mortgage Insurance: Proprietary loans aren’t federally guaranteed, so you won’t need to pay mortgage insurance premiums.
- Higher Limits on Borrowing: Federal limits on HECM borrowing won’t apply to a Longbridge Platinum reverse mortgage. The lender limits loans to $4 million, more than five times higher than the federal HECM limit.
Customer Experience & Online Tools
A lot of this customer service excellence starts with Longbridge’s website, which is stocked with educational resources and easy-to-use loan-finding tools.
Longbridge has the best online quote generator in the reverse mortgage market. You can get a reasonably accurate quote by entering your address and a few financial details. This quote can’t be 100 percent accurate since it doesn’t include a hard credit check.
The quote box will show options for Home Equity Conversion Mortgage (HECM) loans endorsed by the Federal Housing Administration.
The quote box will also show other options, such as Longbridge’s proprietary reverse mortgage, which it markets as a Platinum loan.
Some clients I’ve known in the past felt like reverse mortgages let them access their home’s equity with no strings attached.
As you already know from the fees and interest charges we’ve discussed, this isn’t true. At some point, you or your heirs will be responsible for repaying the loan with interest.
Indeed, you won’t have to make payments on the debt as long as you own and live in the home. But you will have to repay the loan:
- If You Move Somewhere Else: Residing somewhere besides your home for 12 consecutive months will result in the loan coming due. This includes moving into assisted living.
- If You Sell the Home: Ideally, you can repay the loan with proceeds from the sale.
- If You Die: Your adult children or other heirs will need to repay the loan. Ideally, they can use proceeds from your estate or from selling your home to pay back your reverse mortgage.
- If You Fail to Maintain the Home: If your home begins to lose value because you aren’t maintaining it — or if you fail to pay taxes or homeowners insurance — your lender can declare the loan due.
Of course, you can repay the loan’s balance whenever you want. Some people even repay the mortgage by getting a regular (forward) mortgage.
Is Longbridge The Best Reverse Mortgage Lender For Your Needs?
Sometimes, our best plans and our ideals simply don’t work out. You may find yourself needing a reverse mortgage to alleviate other debt, to address medical issues, or to provide a source of steady income.
So, if you’re shopping for a reverse mortgage loan, you may as well get a quality loan.
Longbridge specializes in reverse loans. The lender excels with its online access to loans and its customer care throughout the life of your loan.
The Bottom Line – Longbridge Financial Reverse Mortgage Review
Navigating the complexities of reverse mortgages requires a lender that not only offers flexibility and compliance with federal standards but also prioritizes customer experience and education.
Longbridge Financial stands out in this regard, particularly for seniors seeking transparency, reliable customer service, and varied loan options. Their commitment is evident in their easy-to-navigate website, comprehensive information kits, and responsive client support.
Furthermore, the company’s unique offerings, such as the Platinum loan program, demonstrate a tailored approach to diverse financial needs, making Longbridge a compelling choice for those venturing into the reverse mortgage landscape.
How We Review Mortgage Lenders:
Good Financial Cents evaluates U.S. mortgage lenders with a focus on loan offerings, customer service, and overall trustworthiness. We strive to provide a balanced and detailed perspective for potential borrowers. We prioritize editorial transparency in all our reviews.
By obtaining data directly from lenders and carefully reviewing loan terms and conditions, we ensure a comprehensive assessment. Our research, combined with real-world feedback, shapes our evaluation process. Lenders are then rated on various factors, culminating in a star rating from one to five.
Product Name: Longbridge Financial Product Description: Longbridge Financial offers specialized reverse mortgage products designed to empower seniors in accessing their home equity. With a commitment to transparency and educational resources, they provide a comprehensive service that underscores financial flexibility for retirees. Summary Longbridge Financial emerges as a dedicated player in the reverse mortgage industry, priding itself on products that cater specifically to the financial needs and stability of seniors. Unlike general lenders, their focus on reverse mortgages has led to the development of user-friendly online tools and educational materials that demystify the often complex landscape of home equity options. This customer-centric approach is further enriched by their flexible loan offerings, including the proprietary Platinum loan program for high-value homes, setting them apart as a lender that understands and innovates based on their clients’ diverse financial circumstances. Pros Cons
Longbridge Financial Review
Product Name: Longbridge Financial
Product Description: Longbridge Financial offers specialized reverse mortgage products designed to empower seniors in accessing their home equity. With a commitment to transparency and educational resources, they provide a comprehensive service that underscores financial flexibility for retirees.
Longbridge Financial emerges as a dedicated player in the reverse mortgage industry, priding itself on products that cater specifically to the financial needs and stability of seniors. Unlike general lenders, their focus on reverse mortgages has led to the development of user-friendly online tools and educational materials that demystify the often complex landscape of home equity options. This customer-centric approach is further enriched by their flexible loan offerings, including the proprietary Platinum loan program for high-value homes, setting them apart as a lender that understands and innovates based on their clients’ diverse financial circumstances.