Home reversion plans.

Your equity release plan in safe hands

A home reversion plans allows a borrower to sell all or part of their property to raise tax free cash immediately & there are no monthly repayment to meet. The reversion provider, usually a reputable bank or insurance company provide a lump sum based on your property value and your age, or the age of the youngest applicant where there are two home owners. You continue to live in the property as a tenant until you decide to sell your home, in the event of death or going into permanent residential care.

Your home will be valued by an independent surveyor to work out the "open market value". You will not receive the full value of your home, instead the provider will offer you a percentage based on your age and in some cases your health. This is a tax free lump sum and no repayments are required and you continue to live in your home rent free.

These plans generally offer a greater cash value than lifetime mortgages but are not as popular as they involve the sale of your home. You can, however, ask for a guarantee that part of your property will pass to your family, this is known as a part home reversion although the amount of cash you can release will be less to reflect these circumstances.

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Advantages to home reversion plan

  • You make no monthly repayments during your lifetime.
  • You benefit from an increase in the value of home if property prices continue to rise.
  • Eligible for those clients over age 55
  • The older you are, the more money you can release
  • You can still guarantee an inheritance to your Estate on death
  • If you are a smoker or in ill health, you may be able to get a bigger payment.

Disadvantages to a home reversion plan

  • Typically you do not receive the full value of your home’s value, the reversion provider is likely to wait for a number of years before they get their money back.
  • They could be seen as poor value if you die shortly after the home reversion plan starts compared to other schemes available.
  • It is unlikely you can release further equity in the future.
  • By selling part or all of you home, the plan cannot be reversed.
  • Accessing a lump sum may affect your entitlement to some state benefits.
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