If you have heard the term "reverse mortgage second" and wondered what it means, you are not alone. It is a newer product category that many homeowners — and even some mortgage professionals — are still learning about.

Here is a plain-language explanation.

The Traditional Reverse Mortgage

A traditional reverse mortgage — most commonly the FHA-insured Home Equity Conversion Mortgage (HECM) — is a loan for eligible older homeowners that allows them to access a portion of their home equity without a required monthly principal-and-interest payment. You can learn more about traditional reverse mortgage options including how they work and what borrowers are responsible for.

One important feature of a traditional HECM: it typically pays off any existing first mortgage at closing. The reverse mortgage then becomes the only lien on the property.

That works well for many homeowners. But it creates a challenge for homeowners who have a very low first-mortgage interest rate they do not want to give up.

The Problem With Low-Rate First Mortgages

Many homeowners secured mortgage rates in the 2% to 4% range in recent years. For these homeowners, refinancing the entire first mortgage — even to access equity — may not make financial sense.

A cash-out refinance would replace that low-rate first mortgage with a new loan at current rates. A traditional HECM would also pay off the first mortgage at closing.

Neither option preserves the existing first mortgage.

What a Reverse Mortgage Second Does Differently

A second-lien reverse mortgage is a proprietary (non-FHA) product specifically designed to sit behind an existing first mortgage.

Depending on the product and borrower eligibility, a reverse mortgage second may allow a homeowner to:

• Access a portion of their home equity
• Leave the existing first mortgage in place
• Potentially avoid a required monthly principal-and-interest payment on the second lien

This is a meaningfully different structure from a traditional reverse mortgage.

Important Distinctions

A reverse mortgage second is not the same as a traditional HECM reverse mortgage. Key differences include:

• It is a proprietary product, not FHA-insured
• It is designed to sit behind an existing first mortgage
• Terms, eligibility, age requirements, costs, and product availability vary
• Not all homeowners will qualify
• Counseling requirements vary by product and state

Who May Want to Explore This?

A reverse mortgage second may be worth exploring for eligible older homeowners who:

• Have significant home equity
• Have an existing first mortgage with a low interest rate they want to keep
• Want to access equity without refinancing the entire first mortgage
• Do not want a required monthly principal-and-interest payment on a new second lien

This is not a product for everyone. Eligibility depends on age, equity, the existing first mortgage, property type, financial assessment, and available loan programs.

For a deeper look at how this product compares to a HELOC, see Reverse Mortgage Second vs. HELOC: What's the Difference?. And if you still have an existing mortgage and are wondering how either type of reverse mortgage interacts with it, read Can You Get a Reverse Mortgage With an Existing Mortgage?

You can also explore the Reverse Mortgage Second product page for a full comparison of options and borrower responsibilities.

Borrower Responsibilities Remain

Regardless of the product, homeowners with a reverse mortgage second must continue to:

• Pay property taxes
• Maintain homeowners insurance
• Maintain the property
• Pay applicable HOA dues
• Meet occupancy requirements
• Continue making payments on the existing first mortgage

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Have Questions About Your Own Home?

Every homeowner's situation is different. Your age, equity, current mortgage, interest rate, property, financial goals, and available loan programs all matter.

Stephanie can help you compare your options.

Schedule a Reverse Mortgage Review | Talk With Stephanie

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Second-lien reverse mortgage products are proprietary and are not FHA-insured. Terms, eligibility, minimum age, equity requirements, costs, counseling requirements, product availability, and guidelines vary by product and state. Not all homeowners will qualify. This article is for educational purposes only and does not constitute a loan commitment or guarantee of loan approval. NMLS Individual #1087365 · NMLS Company #1147207 · CA DRE #01265685