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Reversion Plans
Under a reversion plan, home owners over 65 may sell a part or all of their home at the outset to the reversion company, whilst retaining the right under a lease (usually with a fixed peppercorn rent - less than £10 p.a.) to live in it for the rest of their life. The reversion company applies a discount against the current value of the property, to compensate them for not taking possession of their portion of the property until years later.
The discount on value applied by the reversion company will reflect the relative age of the applicant(s) - the younger and healthier you are, the lower the sum they will offer. Did you know however that if you have existing or past health problems, this may improve the value of the offer from the reversion company? Use an adviser recommended by us to discuss this topic!
There is a risk of the owners receiving a poor return under these schemes if they die or go into a care home within a few years of its inception (although certain financial guarantees can usually be obtained) .
The main features of Reversion Plans are:
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Part or all of the of the home is sold at the outset. |
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A valuation of the property is necessary and a fee for this is payable, together with solicitors costs |
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Once in place, a reversion plan should be considered irrevocable. |
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You will be able to live in your own home as long as you wish. |
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There are no restrictions on how you spend the money you raise. |
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There is no maximum age limit |
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The reversion company take possession of their share of the house after death (second death if joint borrowers), or after the (second) borrower permanently moving into a care home. Typically the house will then be sold. |
Equity release products may involve lifetime mortgages or home reversion plans. If so, to understand their features and risks, ask for a personalised illustration.
All advisers recommended by us are Independent, fully qualified and regulated by the Financial Services Authority. They will also have the specific equity release qualifications as required by members of SHIP (Safe Home Income Plans), the industry association which was set up to help ensure fair plans for consumers, with members subscribing to a common code of ethics and clear literature.
"There has never been a more important time for independent financial advice in equity release."
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