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 unique reverse mortgage from Finance of America Reverse (FAR) that allows homeowners to borrow against their home equity through a second mortgage.

Unlike other reverse mortgages, it is specifically designed to work as a second lien, so borrowers can keep their first mortgage unchanged.

The loan provides a lump sum at closing, has a fixed interest rate, and does not require monthly payments.

Available to homeowners 55 and older (62+ in Texas), this product offers an alternative to traditional home equity loans and HELOCs, providing flexibility without compromising your current loan terms.

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Real-Life Example

Sarah, a 62-year-old homeowner in Florida, owns a $1,000,000 home with a $300,000 first mortgage at a 3% fixed rate.

She needs $200,000 for renovations and debt consolidation but doesn’t want to refinance and lose her low rate.

With HomeSafe Second, she secures the $200,000 she needs as a lump sum, avoids monthly payments on the second loan, and keeps her first mortgage unchanged.

This lets her access equity without disrupting her financial stability.

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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 HELOCS, Refi's, and HECM's

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

Vs. HELOCs

HomeSafe Second does not require monthly payments, unlike HELOCs, which often have variable rates and fixed repayment terms.

With HomeSafe Second, there’s no risk of rising interest rates or a repayment schedule that might strain your finances. It provides a lump sum with a fixed rate, offering stability and predictability.

Vs. Cash-Out Refinances

Cash-out refinances require replacing your existing mortgage, often at a higher interest rate, which could increase your monthly payments.

HomeSafe Second allows you to keep your low-interest first mortgage intact while accessing additional funds through a second lien.

This makes it an ideal choice for homeowners who want to preserve favorable loan terms while unlocking equity.

Vs. Traditional Reverse Mortgages (HECMs)

HECMs are federally insured and come with required mortgage insurance premiums, adding to the overall cost.

HomeSafe Second eliminates these insurance costs and typically has lower closing fees.

Additionally, HomeSafe Second caters to higher-value homes and offers more flexibility in loan amounts.

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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