Tom Selleck has spent the last decade telling TV audiences that a reverse mortgage can help them stay in their home. He’s the face of American Advisors Group, better known as AAG. The company has become one of the most recognized names in the reverse mortgage business, but recognition doesn’t automatically mean it’s the right lender for you.
AAG is a lender, not a loan product. The company originates Home Equity Conversion Mortgages (HECMs), the FHA-insured reverse mortgages that most seniors use, along with a few proprietary options for higher-value homes. If you’re considering an AAG reverse mortgage, here’s what you need to know about how it works, what it costs, and how the company fits into the broader market.
What Is AAG Reverse Mortgage?
American Advisors Group was founded in 2004 and grew into the nation’s largest reverse mortgage lender by volume. In 2022, Finance of America acquired AAG for $350 million, folding it into a family of brands that also includes Finance of America Reverse and One Reverse Mortgage. AAG still operates under its own name and maintains its headquarters in Irvine, California.
The company focuses almost exclusively on reverse mortgages for homeowners 62 and older. That specialization means its loan officers know the product well, but it also means AAG doesn’t offer forward mortgages, home equity loans, or other financing if a reverse mortgage turns out not to be the right fit.
How an AAG Reverse Mortgage Works
Most AAG reverse mortgages are HECMs, which are insured by the Federal Housing Administration. To qualify, you must be at least 62, own your home outright or have a significant amount of equity, and use the property as your primary residence. The loan amount depends on your age (older borrowers can borrow more), the appraised value of your home, current interest rates, and the HECM lending limit.
For 2025, the HECM lending limit is $1,209,750. If your home is worth more than that, you can still get a HECM, but the loan calculation caps at that figure. AAG also offers jumbo reverse mortgages for homes above the limit, though those are proprietary loans without FHA insurance.
You can receive your money in several ways:
- A lump sum of cash at closing
- Fixed monthly payments for a set term or for life
- A line of credit you can draw on as needed
- A combination of these options
No monthly mortgage payment is required. Instead, the loan balance grows over time as interest and fees accrue. You remain responsible for property taxes, homeowners insurance, HOA dues, and basic maintenance. If you fall behind on those obligations, the lender can foreclose.
Types of Loans AAG Offers
HECM (Home Equity Conversion Mortgage)
This is the standard reverse mortgage, backed by the FHA. It comes with an upfront mortgage insurance premium of 2% of the appraised value (or the lending limit, whichever is lower) and an annual premium of 0.5% on the outstanding balance. The FHA insurance protects you if the lender goes under and protects the lender if the loan balance exceeds the home’s value when it’s repaid.
AAG Jumbo Reverse Mortgage
For homes valued above the HECM limit, AAG offers a proprietary jumbo reverse mortgage. These loans aren’t FHA-insured, so they don’t carry the same federal protections. They may have different eligibility rules, higher minimum home values, and variable rates. They can make sense for borrowers with expensive properties who want to access more equity than a HECM allows.
HECM for Purchase
AAG also originates HECM for Purchase loans, which let you buy a new home with a reverse mortgage. You pay a substantial down payment (often 40% to 60% of the purchase price) and finance the rest. This option appeals to seniors who want to move to a smaller or more accessible home without taking on a monthly mortgage payment.
What an AAG Reverse Mortgage Costs
Reverse mortgages aren’t cheap. AAG’s fees are similar to other HECM lenders because most costs are set by the FHA. Expect to pay:
- Origination fee: Up to $6,000, calculated as 2% of the first $200,000 of the home value plus 1% of the remainder.
- Upfront mortgage insurance premium: 2% of the appraised value or lending limit.
- Third-party closing costs: Appraisal ($400–$600), title search and insurance ($500–$1,500), flood certification, and recording fees.
- Servicing fee: Some lenders charge $30–$35 per month; AAG may waive or include this depending on the loan.
- Ongoing interest: Rates can be fixed or variable. Variable rates adjust monthly or annually and can change your loan balance quickly.
You can finance most of these costs into the loan, which means you won’t pay them out of pocket, but the balance grows faster. AAG’s website has a calculator that gives you a rough estimate of proceeds and fees.
Pros and Cons of Choosing AAG
Pros
- Specialization: AAG only does reverse mortgages, so its staff understands the nuances.
- Scale: As one of the largest lenders, it has streamlined processes and a national footprint.
- Education: The company offers extensive guides, calculators, and webinars.
- Brand recognition: You’ve probably seen AAG’s ads, which can make it feel familiar.
Cons
- Limited product range: No forward mortgages or HELOCs if you decide against a reverse mortgage.
- Cost: Fees are on par with competitors, but still significant.
- Corporate changes: The Finance of America acquisition may have changed some service terms; always confirm current details.
- Sales pressure: Like any large lender, AAG has aggressive marketing. Take your time.
How AAG Compares to Other Lenders
AAG competes with lenders like Mutual of Omaha Mortgage, Longbridge Financial, and Finance of America Reverse (its sister company). Rates and fees are often similar because HECM pricing is standardized. The difference usually comes down to service, speed, and whether a lender offers proprietary jumbo loans. AAG’s jumbo product is competitive for high-value homes, but you should get quotes from at least two or three lenders before committing.
One important note: AAG and Finance of America Reverse are both owned by Finance of America. If you get quotes from both, you’re not getting a truly independent comparison.
Who Is an AAG Reverse Mortgage Best For?
A reverse mortgage can work well for homeowners who:
- Are 62 or older and plan to stay in their home long-term.
- Have substantial equity but limited cash flow.
- Can keep up with property taxes, insurance, and maintenance.
- Don’t need to leave the home to heirs free and clear (or have other assets to do so).
It’s a poor fit if you plan to move within a few years, if you’re struggling to pay basic housing costs, or if you want to leave the home debt-free to your children. In those cases, selling and downsizing, a home equity loan, or help from family may be better options.
Common Misconceptions About AAG Reverse Mortgages
Myth: The bank takes your home. You retain the title. The lender only gets paid when you sell, move out, or pass away.
Myth: You can’t leave the home to your heirs. Your heirs can inherit the home, but they’ll need to repay the loan or sell the property. If the loan balance exceeds the home’s value, FHA insurance covers the difference for HECMs.
Myth: Reverse mortgages are only for desperate seniors. Many financially stable retirees use them for cash flow, medical expenses, or delaying Social Security.
Myth: AAG is a government agency. It’s a private lender. The HECM program is government-insured, but AAG is not part of HUD.
What to Do Before You Apply with AAG
If you’re leaning toward an AAG reverse mortgage, take these steps:
- Get quotes from at least three lenders, including AAG. Compare APR, origination fees, and servicing fees.
- Complete HUD-approved counseling. It’s required for HECMs and will help you understand the trade-offs.
- Run the numbers with a calculator. See how much you’d receive and how the balance grows over 10, 20, and 30 years.
- Talk to your family. If you plan to leave the home to heirs, make sure they understand the loan terms.
- Check AAG’s current licensing and reviews. The company is licensed in many states, but regulations vary.
Finally, remember that an AAG reverse mortgage is a financial tool, not a magic fix. It can provide valuable cash flow in retirement, but it also adds complexity and cost. Treat the decision with the same care you’d give any major financial commitment.