Pros / Offers plenty of disclosures and a set of guarantees and guidelines that should inspire confidence in their offerings.
Cons / Not available in all 50 states.
Verdict / A stand-up pedigree, with management and investors stemming from the hallowed halls of academia and the Federal Reserve, clear guidelines and guarantees, as well as all the information and disclosures you may need for this sometimes daunting financial process.
Maybe there's something reassuring about getting a loan from a company with an Ivy League seal of approval, as Longbridge Financial does. Before joining the New Jersey-based lender at its founding in 2012, CEO Christopher Mayer was best known as a high profile real estate professor at Columbia University Business School (a position he still holds) and a visiting scholar at the Federal Reserve.
The company also has a thumbs up (and financial investment) from Alicia M. Munnell, a former member of the Council of Economic Advisers (during the Clinton administration) and 20-year veteran of the Federal Reserve Bank of Boston, which runs the Center for Retirement Research at Boston College.
That kind of pedigree might be enough to catch the attention of financial advisors, to whom Longbridge markets its reverse mortgage products with white papers, webinars, videos, and their own HECM Advisor Network, which promises discounts for the advisors' clients who take out a Longbridge loan.
Longbridge serves 47 states (all but Alaska, Hawaii, and New York) and is a member of the National Reverse Mortgage Lenders Association, but is not among the top 10 reverse mortgage originators by volume for 2017. That might not be a bad thing for anyone who favors a more personal approach — the site even includes bios for all of its loan officers. The "Longbridge Guarantee" includes a pledge to inform people if it seems that a reverse mortgage is not right for them. The company also promises to try to close your mortgage within 45 days of receiving an application and the HUD-approved counseling certificate.
The Longbridge site is one of the most straightforward we've seen, offering plenty of explanations about reverse mortgages and the application process without requiring personal information from users first. There is a prominent page describing the counseling one must receive before taking out an HECM loan, with phone numbers for various agencies that have more information. Much less noticeable is a tab for the "News & Information" section, which includes an article that details the various costs (without listing actual numbers) associated with a HECM loan.
Perhaps more important, Longbridge has a solid reputation in the industry. There is only one complaint about it on the Consumer Financial Protection Bureau database (and it appears to be about a wrong phone number) and no complaints on BBB.org, where it has an A+ rating.
Fixed-rate lump sum disbursement: The interest rate remains the same for the life of the loan (great if it's low when you apply), but you can only receive your loan in one lump sum, which will be determined by your home equity, your age, and the first-year draw limit (60 percent of the loan total).
Adjustable-rate term disbursement: You can receive the amount of your loan in fixed monthly payments for a set number of months, but the interest rate will be variable from year to year or month to month, based on the London Interbank Offer Rate (LIBOR).
Tenured: You can receive a set amount of money from your loan every month for the life of your loan (calculated by assuming you will live to 99), and the rate varies based on the LIBOR.
Line of credit: Instead of receiving your loan payment upfront, you can leave it as a line of credit, and the amount you don't draw down will grow with compound interest each year, based on the LIBOR.
Combination: This adjustable-rate loan can be a combination of all of the above, at the adjustable rate based on LIBOR.
HECM for Purchase: This type of loan allows you to buy a new home directly with a reverse mortgage.
For its wholesale product and for clients of its HECM Advisors Network, Longbridge offers a Gold Program that offers lower fees to borrowers who meet certain criteria such as high credit scores.
Proprietary Reverse Mortgages
Longbridge recently announced it would be offering more than one "jumbo" reverse option — the non-FHA-backed mortgages available for higher-value homes — including one with a fixed interest rate. As of right now, its advisors' site describes a Platinum Loan option with low upfront costs. Reminder: Without FHA backing, borrowers or their heirs may be responsible for the full amount of the loan when it becomes due, even if the home's value drops.