If you have equity in your home and need access to a lump sum of cash, or possibly even a monthly income, then a Home Reversion plan may be suitable for you. The way it works is fairly simple: you sell your home, or just a percentage of it, to the loan provider in return for money. You are then still free to live in your home until your death or until you have to move into a care home.
Benefits of Home Reversion Plans
With a home reversion plan, it’s entirely your money, and you do not have to make any payments.
Popular reasons for using equity release schemes include:
Repaying an existing mortgage and settling outstanding debt
Home improvements, a new car, caravan or holiday home
Improving your standard of living
Helping or treating your family
Generating additional income
Private medical care
Home Reversion is another type of equity release, just like Lifetime Mortgage. The main difference is that while your property is mortgaged in a lifetime mortgage, it is sold outright in a home reversion.
While the property is sold, or legally transferred to the reversion company, you still retain the rights to live in the house, rent-free. This arrangement often seems dubious or full of loop holes to many people, but it’s completely legal and transparent and you will have documents underlining your right to live in the house till you and your spouse die or move into long term care.
When you sell the house to the reversion company, they offer you anywhere between 20-60% of the property’s value as a lumpsum or in periodic installments. The property is sold by the owners when you leave, and the proceeds remain with them.
Another difference (and also an advantage) with a home reversion plan is that you can sell only part of the house – like 30% or 50% of it. Accordingly, your beneficiaries get the remainder of the proceeds from the sale.
How much value you receive out of your house depends on the real estate market, as well as your health and age. With the help of a financial adviser you will be able to determine if this is the right investment for you, and also negotiate a good deal.
Benefits of Equity Release
- Unlock tax free cash
- Use Cash as you wish
- Additional cash lump sum may be available
- No Obligation Quote
- Compare the Whole Market
- Exclusive Offers & Free Advice
- No Credit Checks
- Independent and Impartial
- Simple & Jargon free