A reverse second mortgage offers greater flexibility in repayment – no monthly mortgage payments are required on this loan. You must continue to pay the existing first mortgage payment, property taxes, homeowners’ insurance, flood insurance (when applicable), HOA dues and maintain the home.

As long as the terms of the HomeSafe Second reverse loan and any first lien loan are met, a reverse second mortgage does not have to be repaid until the home is no longer the primary residence of at least one borrower or the home is sold.

Usually, the last surviving borrower or their estate sells the home to repay the loan(s). Existing liens may also be repaid from other assets, proceeds from a life insurance policy, or a loan refinance subject to any first lien loan-related restrictions.

Reverse mortgages have a non-recourse feature, which means that the total amount that you owe on the reverse mortgage can never exceed the appraised value of your home.

However, if your home increases in value, all equity that remains once the reverse mortgage and first liens are paid off belongs to you and your estate.

If you permanently leave the home, the reverse loan servicer will issue a Repayment Notice that states the mortgage is due and payable.

In addition to interest, the costs can include a property appraisal fee, origination fee, closing costs, servicing fee and a modest charge for independent counseling. While closing costs vary based upon the type and size of the loan, they’re similar to those for any traditional mortgage.

You can roll most of the up-front costs into the loan, so out-of-pocket expense can be minimized, and you can reduce your costs by taking a lower amount of proceeds that are available to you. We will give you a detailed cost breakdown and explain the different interest and pricing options available.

As a reverse second mortgage borrower, you can enjoy all the benefits a reverse mortgage can bring to your life, including making no monthly mortgage payments on the reverse mortgage. However, you must, continue to live in the home as your primary residence, pay your homeowner’s insurance, real estate taxes, and any applicable HOA or condominium assessments and fees, keep your first mortgage current when permitted by law, maintain your home,  and comply with the obligations in the security instruments.

A reverse second mortgage does not change any of the requirements associated with your first lien mortgage, including the requirement that you make timely payments to your first lien servicer.

Since payments are not being made on the reverse second mortgage, it’s common for some reverse mortgage borrowers to feel like they no longer own their home. This is not the case. A reverse mortgage is just like any other mortgage, meaning that there is a lien on your house that has to be paid back at some time, but you still own your home subject to the lien(s) and your name remains on the title.

You may also be concerned that you could somehow lose your home if you obtain a reverse mortgage. The reverse lender will not be able to foreclose on your home, even if the unpaid balance exceeds the value of your home as long as you continue to manage your responsibilities: live in the home as your primary residence, pay your property taxes, homeowner’s insurance, flood insurance (when applicable), HOA dues, maintain your home, and meet all of the first-lien mortgage obligations (when permitted by state law). If you do not meet these obligations, the loan servicer will attempt to contact you to resolve the situation. We highly recommend you keep an open line of communication with the servicer when any issues arise.

Another common concern is that there will be nothing left of your estate to leave to your heirs once you pass away, or worse, you will end up saddling them with even more debt. The non-recourse feature of a reverse mortgage assures that you and your estate will never owe more than the value of your house. In the event the debt exceeds the value of the home, your heirs simply walk away. This is a worst-case scenario. This relates to the second lien mortgage only. Your first lien mortgage, which has not been replaced or extinguished, may be a recourse loan.