What is HomeSafe Second? Access Equity Without Refinancing Your First Mortgage

HomeSafe Second is a reverse mortgage option that lets homeowners aged 55 and older access their home equity while keeping their current first mortgage in place.

With no monthly payments and a fixed interest rate, this product is designed for financial flexibility.

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This article explains how HomeSafe Second works, its benefits, and how it compares to other equity products like HELOCs and cash-out refinances.

What is HomeSafe Second?

HomeSafe Second is a special kind of loan for people who own a home. It lets them borrow money using the value of their home, without changing their main mortgage.

This loan gives homeowners a big payment of money all at once. They don’t have to make monthly payments, and the interest rate stays the same.

It’s made for people who are 55 or older (62 or older in Texas). It’s a different choice instead of using other home loans, and it helps people get extra money while keeping their current loan the same.

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Real-Life Example

Sarah is 62 and lives in Florida. Her house is worth $1,000,000, and she still owes $300,000 on her first loan, which has a low 3% interest rate.

She needs $200,000 to fix up her house and pay off some debt, but she doesn’t want to lose her good loan by getting a new one.

With HomeSafe Second, Sarah gets the $200,000 she needs all at once. She doesn’t have to make monthly payments on this new loan, and her first loan stays the same.

This helps her get the money she needs without messing up her budget.

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How Is HomeSafe Second Different?

There are a few types of HomeSafe Reverse Mortgages, and each one works a little differently.

HomeSafe Second is special because it gives you extra money from your home without changing your current mortgage. This is good if you already have a good interest rate and want to keep your first loan just the way it is.

The other HomeSafe options—like HomeSafe Select and HomeSafe Flex—usually replace your current loan or work like a line of credit or monthly payment plan. That means you might have to change your first mortgage.

Here’s a quick comparison:

• HomeSafe Second: Adds a second loan. You keep your first loan the same. No monthly payments.

• HomeSafe Select: Works like a credit card for your home. You only use what you need.

• HomeSafe Flex: Gives you some money now and the rest in monthly payments.

• Regular HomeSafe Reverse Mortgage: Replaces your current mortgage and gives you different ways to get the money, but it doesn’t keep your first mortgage.

So if you want to keep your current loan and just add extra money, HomeSafe Second is the best fit!

Benefits of HomeSafe Second

• Preserves Your First Mortgage: Keep your low-interest first mortgage intact while accessing additional equity.
• No Monthly Payments: Borrowers are not required to make monthly payments, freeing up cash flow.
• Large Loan Amounts: Borrow up to $4 million, minus the first lien balance.
• Fixed Interest Rate: Enjoy predictability and stability with a fixed-rate loan.
• Non-Recourse Loan: You or your heirs won’t owe more than the home’s value when the loan is repaid.

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HomeSafe Second vs. Other Loan Options

HomeSafe Second offers unique advantages over other options for tapping into home equity:

Vs. HELOCs

HELOCs (Home Equity Lines of Credit) usually make you pay money back every month, and the interest rate can go up.

With HomeSafe Second, you get one big payment of money, and you don’t have to make monthly payments. The interest rate stays the same, so it’s easier to plan.

Vs. Cash-Out Refinances

Cash-out refinances make you replace your current mortgage, which could mean a higher interest rate and bigger monthly payments.

HomeSafe Second lets you keep your current loan and still get extra money with a second loan.

This is great if you have a low rate and don’t want to lose it.

Vs. Traditional Reverse Mortgages (HECMs)

HECMs are another kind of reverse mortgage, but they charge extra insurance costs.

HomeSafe Second doesn’t have those insurance fees and usually costs less to close the loan.

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Requirements for HomeSafe Second

• Age: Available to homeowners aged 55+ (62+ in Texas).
• First Mortgage: Must have a fixed-rate, fully-amortized first mortgage.
• Property Type: Only available for primary residences.
• Financial Assessment: Borrowers must pass a financial assessment to ensure they can meet property-related expenses like taxes and insurance.

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FAQs About HomeSafe Second

1. Can I qualify if I have a first mortgage?
Yes, but your first mortgage must be a fixed-rate, fully-amortized loan.

2. What happens if I sell my home?
When the home is sold, the proceeds will first go toward repaying the HomeSafe Second loan. Any remaining equity will be yours.

3. Is HomeSafe Second available in every state?
Currently, it’s available in California, Colorado, Connecticut, Florida, South Carolina, and Texas, with plans to expand to more states.

4. How does HomeSafe Second differ from a HELOC?
Unlike a HELOC, HomeSafe Second has no repayment term or adjustable interest rates and doesn’t require monthly payments.

5. Can I use this for a vacation home or rental property?
No, HomeSafe Second is only available for primary residences.

6. Is there a prepayment penalty?
No, you can pay off the loan at any time without penalties.

7. What costs are associated with HomeSafe Second?
While closing costs apply, they are typically lower than those of traditional reverse mortgages.

8. What happens if my home value decreases?
HomeSafe Second is a non-recourse loan, so you’ll never owe more than the value of your home.

9. Can the funds be used for any purpose?
Yes, you can use the funds for anything, from debt consolidation to home repairs or medical expenses.

10. How is the loan amount determined?
The loan amount depends on your age, the value of your home, and the balance of your first mortgage.

Verify Your Reverse Mortgage Eligibility

Verify Your Reverse Mortgage Eligibility

HomeSafe Second provides a way to access your home equity without giving up your current mortgage terms.

Compared to HELOCs, refinances, and traditional reverse mortgages, it offers unique advantages like no monthly payments, fixed rates, and lower costs.

Consider how this option might fit into your financial plans and help you make the most of your home’s value.

Verify Your Reverse Mortgage Eligibility