As the financial landscape evolves, so do the tools available to help homeowners access their equity as a resource for aging in place. One innovative option for senior homeowners is the HomeSafe® Second Reverse Mortgage. Designed to provide additional financial flexibility, this product can be a game-changer for those looking to maximize their home’s equity without disrupting their existing mortgage.

What is the HomeSafe® Second Reverse Mortgage?

The HomeSafe® Second Reverse Mortgage is a unique loan that allows homeowners aged 55+ 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, providing a distinct advantage for those who want to retain their current mortgage terms while accessing additional funds.

Key Features and Benefits of the HomeSafe® Second Reverse Mortgage

1. Supplemental Income: The HomeSafe® Second Reverse Mortgage provides a way to receive additional cash flow, which can be crucial for covering medical expenses, home renovations, or simply enhancing your retirement lifestyle. The equity from a HomeSafe® Second Reverse Mortgage is paid out in one lump sum with a fixed interest rate. This cash can be used for whatever you may want or need. Many use it to fund aging in place with renovations, paying for caregiving or other services or to bridge the gap created by inflation between their budget and their expenses. Because the funds are distributed as a lump sum, it provides immediate access to a substantial amount of cash.

2. Loan Amounts: This product allows for higher loan amounts compared to traditional Home Equity Conversion Mortgages (HECMs), making it suitable for homeowners with significant equity in high-value homes. In addition, because this is a proprietary reverse mortgage, there is no mortgage insurance premium like there is with a traditional HECM.

3. No Monthly Mortgage Payments: Like other reverse mortgages, the HomeSafe® Second doesn’t require monthly mortgage payments. Repayment is deferred until the homeowner sells the home, moves out, or passes away. It is imperative that the homeowner continue paying their first mortgage, property taxes and insurance on time and in full.

4. Non-Recourse Loan: This means that the borrower or their heirs will never owe more than the value of the home at the time the loan is repaid, offering peace of mind and financial security.

Eligibility Requirements

To be eligible 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 that they want to keep in place.
• Home Value: Typically, this product is ideal for high-value homes with substantial equity.

How the HomeSafe® Second Reverse Mortgage Works

1. Assessment and Application: The process begins with an assessment of your eligibility and a discussion with our loan specialist Jeff Foody to understand your financial goals. If you and Jeff determine that this option would fit your financial plan, he will make sure you are qualified based on initial information like your income, estimated home value and first mortgage balance. If you are qualified, Jeff 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 3^rdparty mandatory counseling session required. There are phone numbers for companies who offer this counseling for you to call in the proposal to set up an appointment. The counseling is usually done over the phone and takes about an hour or less. It is not a quiz or a test; the counselor will just review the loan proposal with you over the phone. Once the counseling is completed, we will move forward with an application and credit review.

2. Home Appraisal: Once we receive your signed application and the documents we requested to start your loan, an appraisal will be conducted to determine the current market value of your home. You are in charge of the timeline. You set the appointment with the appraiser so they will only come out when you are ready.

3. Approval and Funding: Once approved, the loan proceeds are disbursed as a lump sum, providing you with immediate access to your equity.

4. Repayment: The loan does not require monthly mortgage payments; it is repaid when the home is sold, the homeowner moves out, or the homeowner passes away. The amount owed will be the loan balance or the home’s sale price, whichever is lower. Since this is a second lien position loan, the first lien will be paid off first and any remaining equity will go to this lien. If there is more equity available in the home than the balance of the 1^stand 2^ndliens, it will go to your heirs as described in your will or trust.

Is the HomeSafe® Second Reverse Mortgage Right for You?

The HomeSafe® Second Reverse Mortgage can be 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 our expert loan officer Jeff Foody to ensure it aligns with your overall financial strategy.