As the financial landscape evolves, so do the tools available to help homeowners unlock their equity. One innovative option for homeowners age 55+ is the HomeSafe® Second Reverse Mortgage. Designed to provide additional financial flexibility, this product can maximize your home equity without disrupting your existing mortgage.
What is the HomeSafe® Second Reverse Mortgage?
The HomeSafe® Second Reverse Mortgage, is a unique reverse mortgage. It allows homeowners aged 55 and older to tap into their home equity without paying off their existing first mortgage. This reverse mortgage operates as a second lien, meaning it doesn’t interfere with the primary mortgage. This provides a distinct advantage for those who want to retain their current mortgage terms while accessing additional funds.
Key Features and Benefits
- Supplemental Income: The HomeSafe® Second Reverse Mortgage provides a way to receive additional cash flow. This increase in budget can be crucial for covering medical expenses, home renovations, or simply enhancing your retirement lifestyle. The HomeSafe® Second pays out your home equity as cash in one lump sum with a fixed interest rate. Use this cash for whatever you may want or need. Many use it to fund aging in place or to bridge the budget gap created by inflation.
- Loan Amounts: The HomeSafe® Second allows for higher loan amounts than Home Equity Conversion Mortgages (HECMs). This makes it suitable for homeowners with significant equity in high-value homes. In addition, there is no mortgage insurance premium like there is with a traditional HECM.
- No Monthly Mortgage Payments: Like other reverse mortgages, the HomeSafe® Second doesn’t require monthly mortgage payments. It is imperative that the homeowner continue paying their first mortgage, property taxes, and insurance on time and in full.
- Non-Recourse Loan: You will never owe more than your home’s value at repayment, offering peace of mind and financial security.
Eligibility Requirements
To qualify for the HomeSafe® Second Reverse Mortgage, borrowers must meet specific criteria:
- Age: The homeowner (or at least one homeowner if married) must be 55 years or older.
- Primary Residence: The property must be the borrower’s primary residence.
- Existing Mortgage: Homeowners must have an existing mortgage they want to keep in place.
- Home Value: Typically, this product is ideal for high-value homes with substantial equity.
How It Works
- Assessment and Application: Firstly, we review your eligibility with one of our loan specialists to understand your financial goals. Once we determine this option fits, we qualify you based on your income, home value, and mortgage balance. Once qualified, we will send you a loan proposal to review. The proposal is a loan snapshot based on an estimated property value. This is all done without a credit check. Before we can take an application, there is a 3rdparty mandatory counseling session required. The counseling is usually done over the phone and takes about an hour or less. We will move forward with an application and credit review upon completion of counseling.
- Home Appraisal: When we receive your application and documentation, an appraisal will be done to determine your home’s current market value. You are in charge of the timeline. You set the appointment with the appraiser so they will only come out when you are ready.
- Approval and Funding: Once approved, you’ll receive the loan proceeds as a lump sum, giving you instant access to your equity.
- Repayment: Repayment is required when the home is sold, the homeowner moves out, or passes away. The amount owed will be the loan balance or the home’s sale price, whichever is lower. There are never any monthly mortgage payments required. As a second lien, the first lien gets paid off first. Any remaining equity goes to this lien. If there’s more equity than the balance of both liens, it goes straight to your heirs as specified in your will or trust.
Is the HomeSafe® Second Reverse Mortgage Right for You?
The HomeSafe® Second Reverse Mortgage is an excellent option for homeowners aged 55+ who:
- Want to retain their existing mortgage and its terms.
- Need additional funds for significant expenses or to enhance their retirement.
- Own a high-value home with substantial equity.
The HomeSafe® Second Reverse Mortgage offers a versatile and flexible solution for those looking to maximize their home equity while retaining their existing mortgage. By providing a way to access substantial funds without monthly mortgage payments, it can help enhance financial stability and quality of life in retirement. However, as with any financial product, it’s essential to consider your long-term plans and consult with one of our expert loan officers to ensure this aligns with your overall financial strategy.