You want to choose a trustworthy reverse mortgage lender with solutions that fit your needs and excellent customer service. This guide offers the insights you need to make an informed decision about whether a reverse mortgage from the American Advisors Group (AAG) is right for you.
In this piece, we'll walk you through an overview of AAG, information about reverse mortgages, a comprehensive review of AAG's reverse mortgage products, feedback from AAG customers, and more.
Unlock The Money In Your Home’s Equity
- Enjoy retirement now by accessing the equity in your home
- Fast, easy and secure application
- Many reverse mortgage options
An overview of AAG
According to AAG's website, it offers "considerate solutions and personalized service to our customers — all in an effort to help them and all older adults have the retirement they deserve."
AAG focuses solely on customers in their 60s and older to help them prepare for retirement, providing a suite of options they can use to tap their home's equity.
What is equity? Put simply, the equity in your home refers to the difference between your home's value and how much you owe on your mortgage. For example, if you have a home that's worth $200,000 and you've paid off $100,000 of your principal, you have $100,000 of equity in your home.
AAG was founded in 2004 by Reza Jahangiri in Orange County, California, with main offices in California, Georgia, New York, and Texas. AAG has over 1,000 employees and is licensed to do business in 49 states (it caters to every state but Massachusetts) and the District of Columbia (DC). The company is approved by the U.S. Department of Housing and Urban Development and carries a B rating with the Better Business Bureau.
Is AAG a reputable company?
Yes, AAG is a reputable company, with excellent ratings from customers on Trustpilot. To add to its credibility, the company is also a member of the National Reverse Mortgage Lenders Association (NRMLA).
It’s important to note that AAG settled with the Consumer Financial Protection Bureau on Oct. 8, 2021. Under the terms of the order, it is prohibited from misrepresenting home values to consumers and must pay $173,400 in consumer redress and a $1.1 million civil money penalty. The order and settlement are not considered an admission of guilt or a finding of violation of the law.
Who owns AAG reverse mortgage?
Reza Jahangiri, the CEO of AAG, owns the company. Under his leadership, the company has developed a range of AAG reverse mortgage options, including residential services.
What is a reverse mortgage?
If you’re 62 or older and need money for any reason — to float your retirement expenses, pay for health care expenses, and more — you may want to consider getting a reverse mortgage.
A reverse mortgage is a home loan that allows you to convert part of the equity in your home into cash. You can borrow up to your net principal limit. The net principal limit refers to the combination of your home equity value, your age, the reverse mortgage type you choose, and your interest rate.
With a reverse mortgage, an appraiser evaluates your home value. The lender will decide how much to lend you based on your home value, the age of the youngest borrower or eligible non-borrowing spouse, and current interest rates.
If you qualify, the lender pays off your current home loan balance and pays you a lump sum or a fixed amount each month. Some lenders also offer a line of credit, which you can use as you need it. It’s similar to a home equity line of credit, or HELOC.
However, you must continue to pay homeowners insurance and property taxes. You must also keep up with maintenance on your home. If you fail to do so, your loan may become due and you’ll be required to pay it back.
Your heirs must pay the reverse mortgage back when you die, or you must pay it back when you leave the home or move away. In most cases, you or your heirs will sell the home and the sale proceeds pay back the loan.
A reverse mortgage isn't right for everyone, so it's important to understand all the pros and cons of a reverse mortgage.
Let's walk through a few of AAG's loan products below.
Reverse mortgage at AAG
A reverse mortgage at AAG may make sense for you if you need extra money in retirement and want to stay in your home rather than sell it. You can use a reverse mortgage for whatever you wish, including medical expenses, travel, or simply save your money.
To qualify for a standard reverse mortgage loan with AAG, you must be at least 62 years old, own your own home, and live in your home as your primary residence. In addition, you are required to complete a counseling course to ensure that you understand what this type of loan entails. You will also undergo a financial assessment to ensure you can pay the necessary property taxes and insurance. This mortgage insurance is required, so that AAG is covered if you default on your loan.
Borrowers can choose from a variety of reverse mortgage payouts from AAG, including the following: a lump-sum payout, a line of credit, or monthly payments.
|Loan amount||Varies, depending on your age, home value, interest rate of your loan, and your current mortgage balance.|
|Loan term||Varies depending on how you choose to access your money.|
|APR||Interest rates vary. They can be fixed or variable.|
|Credit needed||No minimum credit score required|
Jumbo reverse mortgage at AAG
The AAG Advantage jumbo reverse mortgage allows you to withdraw your home's equity — up to $4 million — with a fixed interest rate. You can get the full amount at closing. It's best for those who have high-value homes.
In order to qualify, you must be at least 60 years old, own a high-value property, and the property must be your primary residence. You must complete a counseling course and a financial assessment so you understand the details involved in a jumbo reverse mortgage.
You do not have to purchase mortgage insurance, unlike traditional reverse mortgage and refinance loans through AAG.
Note that the Advantage jumbo reverse mortgage is not available in all states. Contact AAG to find out availability in your state.
|Loan amount||Up to $4 million|
|Loan term||Varies depending on how you access your funds.|
|APR||Interest rates vary. Contact an AAG specialist to find out your rates.|
|Credit needed||No minimum credit score required|
HECM for purchase loan at AAG
Are you considering how to get a loan to purchase a home? Perhaps you’re ready to downsize and simplify your life. A home equity conversion mortgage (HECM) for purchase loan, also called a reverse for purchase, is a government-insured loan that allows you to purchase a new home and eliminate monthly mortgage payments. You only need to furnish a down payment.
The HECM for purchase loan, which is backed by the Federal Housing Administration (FHA), combines a reverse mortgage with the equity from the sale of your previous home.
In other words, it allows you to take care of everything in one simple transaction. You only make one initial payment toward the purchase. Like a regular reverse mortgage, you must keep paying property taxes and homeowners insurance and maintain your home.
To be eligible, you must be 62 or older, your new home must qualify as your primary residence, and you must move into your property within 60 days of closing. You should also have enough of a down payment to buy your home and meet the HECM financial requirements.
|Loan amount||Up to $822,375|
|Credit needed||No minimum credit score required|
Refinance loan at AAG
You can refinance using a rate and term refinance or a cash-out refinance. A refinance is best for those who want to change the conditions of their current mortgage. In both rate-and-term and cash-out refinance scenarios, you'll receive new funds according to the new loan terms you select.
- Rate-and-term refinance: A rate-and-term refinance can refer to several options. It could refer to refinancing your mortgage to get a lower interest rate or switch from an adjustable rate (a rate that changes) to a fixed rate (a rate that stays the same). It could also refer to changing how long you pay on your mortgage. For example, you might switch from a 15-year mortgage to a 30-year one.
- Cash-out refinance: A cash-out refinance means you take out a loan that exceeds your mortgage amount. For example, you might owe $50,000 on your mortgage, and you cash-out refinance for $65,000, giving you $15,000 in cash. You can use the proceeds as you like, including funding home modifications, making a large purchase, or paying off debt.
To be eligible, consult with a home equity specialist at AAG. Eligibility requirements include an application, review of your qualifications, and a new appraisal of your home to determine its current value. You’ll also need a credit score of 620.
What AAG customers are saying
On its website, AAG's own customer satisfaction rating claims a 98% customer satisfaction rate from client surveys as of October 30, 2019.
AAG has a 4.5 out of 5 rating out of 4,398 reviews on Trustpilot. A total of 67% of individuals have rated the company and its reverse mortgage professionals as “excellent” and another 17% have put the company in the “great" category.
FAQs about AAG
What’s the difference between AAG and other reverse mortgage companies?
AAG offers a wide variety of products. You can also tap into educational tools to help you decide whether a reverse mortgage will fit your needs. For example, you can find a reverse mortgage calculator on AAG's website.
How much does a reverse mortgage cost?
You'll pay both upfront fees and ongoing costs for a reverse mortgage:
- Origination fees: Fees charged to process loan applications.
- Real estate closing costs: These can include an appraisal, title search, mortgage taxes, and other fees.
- Initial mortgage insurance premium: This premium goes to the Federal Housing Administration if your reverse mortgage is a HECM.
- Interest: Interest refers to the percentage that you pay to borrow the funds.
- Servicing fees: You pay servicing fees to handle account statements and other servicing needs.
- Annual mortgage insurance premium: If your reverse mortgage is a HECM, you'll pay the Federal Housing Administration for annual mortgage insurance at 0.5% of the outstanding mortgage balance.
- Homeowners insurance and property taxes. You'll need to keep up with homeowners insurance, property taxes, and flood insurance (if needed).
What are the downsides to a reverse mortgage?
The downsides to a reverse mortgage include that you must pay your property taxes, homeowners association fees, and other costs. If you don't, you could lose your home to foreclosure.
In addition, your heirs could receive less of an inheritance because they have to pay back your reverse mortgage. You'll also pay fees in the form of an upfront mortgage insurance premium as well as origination fees. Finally, reverse mortgages are complex products that deserve careful consideration before you decide to get one. The best mortgage lenders will thoroughly explain how your mortgage works and give you time to decide whether it’s right for you.
The final word on AAG
AAG has high customer satisfaction ratings, so if you’re considering a reverse mortgage, it could be a good fit. Of course, do your due diligence before you choose a reverse mortgage company, because along with the positives, reverse mortgages also have downsides. Learn more about how a reverse mortgage works.