AAG Reverse Mortgage Reviews 2024

AAG Reverse Mortgage is a financial service for homeowners aged 62 and older, allowing them to convert their home equity into cash without monthly mortgage payments. AAG, a leading company in this field, offers various products like the Home Equity Conversion Mortgage (HECM) and Jumbo Reverse Mortgage. They aim to help seniors improve their retirement by providing funds to cover living expenses, medical bills, or other costs. While AAG is reputable and offers excellent customer service, it’s important to understand the costs and impact on your home equity before deciding if it’s the right choice for you.

Reverse mortgages have become a popular financial tool for seniors looking to tap into their home equity to supplement their retirement income. Among the many providers of reverse mortgages, American Advisors Group (AAG) stands out as a leader in the industry. This review of AAG reverse mortgage will cover everything you need to know about AAG’s services, including the pros and cons, how it works, customer experiences, and whether it’s the right choice for you.

What is a Reverse Mortgage?

Before diving into the specifics of AAG, it’s important to understand what a reverse mortgage is. A reverse mortgage is a loan available to homeowners aged 62 and older that allows them to convert part of the equity in their home into cash. Unlike a traditional mortgage, where the homeowner makes monthly payments to the lender, a reverse mortgage pays the homeowner. The loan is repaid when the homeowner sells the home, moves out permanently, or passes away.

About AAG (American Advisors Group)

AAG is one of the largest reverse mortgage lenders in the United States. Founded in 2004, AAG has built a reputation for providing excellent customer service and a range of reverse mortgage products tailored to meet the needs of seniors. Their mission is to help seniors achieve a better retirement by providing financial solutions that allow them to stay in their homes and maintain their quality of life.

AAG Reverse Mortgage Products

AAG offers several reverse mortgage options, including:

• Home Equity Conversion Mortgage (HECM): The most common type of reverse mortgage, insured by the Federal Housing Administration (FHA).
• Jumbo Reverse Mortgage: Designed for high-value homes that exceed the FHA loan limits.
• HECM for Purchase: Allows seniors to buy a new home using a reverse mortgage.

Pros of AAG Reverse Mortgage

1. Reputable Company: AAG is a well-established and reputable company in the reverse mortgage industry. Their extensive experience and commitment to customer service make them a reliable choice.
2. Variety of Products: AAG offers a range of reverse mortgage products to suit different needs, including HECM, Jumbo, and HECM for Purchase.
3. No Monthly Payments: Like all reverse mortgages, AAG’s products do not require monthly mortgage payments. This can significantly ease the financial burden on seniors.
4. Non-Recourse Loan: AAG’s reverse mortgages are non-recourse loans, meaning you will never owe more than the value of your home when the loan is repaid.
5. Flexible Payment Options: Homeowners can choose to receive their funds in a lump sum, monthly payments, a line of credit, or a combination of these options.

Cons of AAG Reverse Mortgage

1. Costs and Fees: Reverse mortgages come with various costs, including origination fees, mortgage insurance premiums, and closing costs. AAG’s fees are competitive, but they can still add up.
2. Complexity: Reverse mortgages can be complex financial products. It’s essential to understand all the terms and conditions before committing.
3. Impact on Inheritance: Since the loan is repaid when the home is sold, it may affect the inheritance you leave to your heirs.
4. Not for Everyone: Reverse mortgages are not suitable for everyone. If you plan to move out of your home in the near future or have other financial options, a reverse mortgage might not be the best choice.

Customer Experiences

AAG has received mixed reviews from customers. Many seniors praise AAG for their excellent customer service, professionalism, and helpfulness throughout the process. They appreciate the clear explanations provided by AAG’s representatives and the ease with which they can access their home equity.

However, some customers have expressed concerns about the complexity of the reverse mortgage process and the costs involved. It’s crucial for potential borrowers to do their homework and ensure they fully understand the terms of the loan.

AAG reverse Mortgage Pricing

When you get a reverse mortgage, there are certain upfront costs. AAG includes these fees in its reverse mortgages to help reduce your out-of pocket expenses.

The interest rates are usually the focus of attention. However, they’re only one part of reverse mortgage costs. You can estimate how much money you might be eligible for by using the AAG reverse-mortgage calculator on their website. The top reverse mortgage provider will be completely transparent with all charges.

Service charge

There is usually a monthly service fee that will cover the cost to maintain your loan over the course of its life. This fee is capped at $35 per month by FHA, while AAG usually waives this charge.

Origination fee

Origination fees are the costs incurred by your lender to originate a reverse mortgage. The origination fee varies depending on your lender and circumstances. The Federal Housing Administration limits origination fees.

• The origination fees are limited to $2,500 for homes worth less than $125,000.
• The lender may charge up 2% of the value of the house above $125,000 and 1% of its total price, up to $6,000.

Costs of closing

The following are included in the closing fees:

• Flood Certification
• Escrow
• Credit Report
• Document preparation
• Recording
• Courier
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• Pest Inspection
• Title Insurance

These services are priced between $20 and $30. Document preparation costs between $150 and $800. Recording can range from $75 to $150.

Appraisal fee

To determine your loan’s amount, you will need an appraisal. The cost of an appraisal varies by area, home value, and type. AAG reports that the average fee for an appraisal is $450.

Rates of Interest

AAG reverse mortgage interest rates could be either fixed or variable. Fixed interest rates are chosen at the beginning and remain unchanged throughout the term of the loan. The London Interbank Offer Rate (LIBOR) is used to determine an adjustable rate. LIBOR forms the basis of all Home Equity Conversion Mortgages reverse mortgage rates.

Fee for Counseling

The reverse mortgage is not complete without counseling. The reverse mortgage is designed to provide protection for older adults who may be financially vulnerable. The counseling will cover the advantages and disadvantages of the loan, as well as eligibility requirements. These fees are on average around $125, according to the National Reverse Mortgage Lenders Association.

The Application Process

The application process for an AAG reverse mortgage typically involves the following steps:

1. Initial Consultation: Contact AAG to speak with a reverse mortgage specialist. They will explain the different products available and help you determine if a reverse mortgage is right for you.
2. Counseling: HUD requires all reverse mortgage applicants to undergo counseling with an independent, HUD-approved counselor. This ensures that you fully understand the implications of a reverse mortgage.
3. Application: If you decide to proceed, you will complete a loan application with the help of your AAG specialist.
4. Appraisal and Underwriting: A professional appraisal of your home will be conducted to determine its value. The loan then goes through the underwriting process to ensure all requirements are met.
5. Closing: Once approved, you will close on the loan and choose how you want to receive your funds.

Is AAG Reverse Mortgage Right for You?

Deciding whether a reverse mortgage is right for you depends on your individual circumstances. Here are some factors to consider:

• Financial Needs: If you need additional income to cover living expenses, medical bills, or other costs, a reverse mortgage could be a viable solution.
• Home Equity: Reverse mortgages are best suited for those with significant home equity.
• Future Plans: If you plan to stay in your home for the long term, a reverse mortgage may be beneficial. If you plan to move soon, it might not be the best option.
• Heirs: Consider the impact on your heirs. A reverse mortgage will reduce the equity left in your home for them.

Alternatives to Reverse Mortgages

If you’re unsure about a reverse mortgage, there are other options to consider:

• Home Equity Loan or Line of Credit: These options also allow you to borrow against your home equity but require monthly payments.
• Downsizing: Selling your home and moving to a smaller, less expensive property can free up equity.
• Retirement Savings: Depending on your situation, drawing from retirement savings or other investments might be a better option.

Reverse Mortgage Offerings of AAG

Reverse Mortgage allows homeowners to turn a part of their equity in their house into cash, without having to sell their property. In a reverse loan, the lender pays the homeowner instead of the traditional mortgage.

The reverse mortgage eliminates the monthly payment of a mortgage. When you die, sell your home, or move, you must repay the loan. You, your spouse or a co-borrower can also do this. For a reverse loan, homeowners must be at least 62. AAG reverse mortgages are listed below.

The Jumbo reverse mortgage loan

The jumbo reverse loan is a private proprietary loan which allows you to withdraw equity up to $4,000,000. Private loans, not insured by the government, are called proprietary loans. The jumbo loans are for high-valued homes. You can eliminate the monthly payment and mortgage insurance premium if you choose this option. You will still have to pay for property taxes, homeowners’ insurance and other costs.

Lump-sum payout

You can receive your equity as a lump-sum payment. This is AAG’s most generous option. You can withdraw 60% of the funds you have in your account within the first year.

Line of Credit Growing

You can access funds whenever you need them. Customers use it as an emergency safety net for unexpected costs. AAG’s growing reverse mortgage line of credit offers a significant feature: the amount of unused principal grows over time. This means that, as the principal is left unused for a longer period of time, you will have more money available.

Purchase Reverse

Reverse-for-purchase is an excellent option for those homeowners who are looking to right-size their home or downsize. The equity in your current home can be used to purchase a new one without monthly payments. You will have to pay for property taxes as well as homeowners’ insurance.

Reverse mortgages can be based on a fixed term or a tenure.

AAG reverse mortgages offer a monthly fixed payment to borrowers. You can choose the number of years that you want to receive your payments. The tenure product allows you to receive payments for as long as your house is occupied and you comply with AAG loan terms.

Conclusion

This review of AAG reverse mortgage highlights both the benefits and potential drawbacks of using AAG for your reverse mortgage needs. AAG is a reputable and experienced company offering a range of reverse mortgage products designed to help seniors access their home equity and improve their quality of life.

However, it’s crucial to thoroughly understand the terms and implications of a reverse mortgage before committing. Consider your financial needs, home equity, future plans, and the impact on your heirs. Additionally, explore alternative options to ensure you make the best decision for your situation.

AAG reverse mortgage can be a valuable tool for the right person, providing financial stability and peace of mind during retirement. If you’re considering a reverse mortgage, take the time to consult with AAG and other lenders, undergo the required counseling, and make an informed decision. This way, you can enjoy a more secure and comfortable retirement.

AAG Reverse Mortgage FAQ

1. What is a reverse mortgage?

A reverse mortgage allows homeowners aged 62 and older to convert part of their home equity into cash without requiring monthly mortgage payments. The loan is repaid when the homeowner sells the home, moves out permanently, or passes away.

2. What products does AAG offer?

AAG offers several reverse mortgage options, including the Home Equity Conversion Mortgage (HECM), Jumbo Reverse Mortgage, and HECM for Purchase.

3. How do I qualify for an AAG reverse mortgage?

You must be at least 62 years old, own your home outright or have a significant amount of equity, and live in the home as your primary residence.

4. What are the costs involved?

Costs can include origination fees, mortgage insurance premiums, closing costs, and servicing fees. It’s important to review all costs with your AAG specialist.

5. Will I still own my home?

Yes, you retain ownership of your home. The lender places a lien on the property, which is repaid when the loan matures.

6. How can I receive my funds?

You can choose to receive your funds as a lump sum, monthly payments, a line of credit, or a combination of these options.

7. What happens if I outlive the loan?

You cannot outlive the loan. As long as you meet the loan terms, you can stay in your home without making monthly mortgage payments.

8. What impact does a reverse mortgage have on my heirs?

When the loan becomes due, your heirs can repay the loan and keep the home, or sell the home and use the proceeds to repay the loan. Any remaining equity belongs to your heirs.

9. Can I lose my home with a reverse mortgage?

You can stay in your home as long as you meet the loan obligations, such as paying property taxes, homeowner’s insurance, and maintaining the home.

10. Is AAG a reputable company?

Yes, AAG is one of the largest and most reputable reverse mortgage lenders in the United States, known for their excellent customer service and wide range of product offerings.