Home Reversion Plans are a type of equity release. They involve selling a proportion of your property to a specialist company, in return for an income or lump sum. You then have the right to live in your home for the rest of your life, rent free on a lifetime lease. You will continue to maintain and insure the property in the meantime.
How much money can you raise?
The amount you will receive from home reversion plans will depend on your age, state of health and the value of the property, but as you will not be paying any rent this will be substantially less than the actual market value – between 35% and 65% depending on age or combination of ages. Our Home Reversion Calculator can give you some idea of how much you may be able to release for the sale of 100% of your home. Lower proportions sold will realise roughly pro-rata sums.
The purchasing company may have to wait many years before it can sell the property and realise its investment. For this reason home reversion providers will not normally consider applicants under the age of 60. For some, the minimum age is 65.
On the other hand, if you leave the property or die soon after selling your home in this way then the company can sell the property, take its profit and the scheme could prove to have been very expensive.
Can I leave something to my family?
You can guarantee leaving some of the property value to your estate by selling a proportion of your home initially. It is possible to then sell a further part later on. By then, the value of the remaining part may have increased with house price rises, and you will be older. This could allow for higher sums for similar proportions sold later.
Although you could receive more for a given proportion than when the plan was initially taken out, the reverse is also true – falling prices will reduce the value of any given share.
Can I still move home?
You are also still able to move home if you want to. This will however be subject to the agreement of the company who owns your home. They would need to buy the new property for you to live in but as long as this meets their criteria it would be considered. Broadly, you could not move to a higher value home unless you provided the difference in cost. They may also reject a property which they may find difficult to sell later, such as a sheltered housing property.
Can I stay in my home for life?
You have an absolute guarantee that you can stay in your own home for life, even though some or all of it may be owned by someone else. To all intents and purposes it will still be your home, but not in legal ownership terms.
Home Reversion Plans can give you certainty
There is a greater degree of certainty with Home Reversion plans than with other forms of releasing equity, as you know from the outset exactly what you will receive and what you are giving up. House price movements become somewhat irrelevant unless you only sell a part of the property initially.
Home Reversion plans can only be arranged by suitably qualified advisers such as Andy Wilson. Many ‘equity release’ advisers can only provide ‘Lifetime Mortgage’ advice. This may mean they cannot consider the full range of financial products to meet your needs. When you meet, Andy will need to fully understand your situation and will ask many questions. This is to ensure the advice he gives and recommendations he makes are appropriate. All recommendations will be confirmed in a written report before you commit to a scheme, and a full illustration of the scheme features, benefits and risks will always be given to you.
Use the ‘Contact Andy’ form below to ask any questions or to arrange a no-obligation meeting to discuss your options.
EQUITY RELEASE MAY REQUIRE A LIFETIME MORTGAGE OR HOME REVERSION PLAN. TO UNDERSTAND THE FEATURES AND RISKS, ASK FOR A PERSONALISED ILLUSTRATION.