Home Reversion Plans
A home reversion plan is where you sell part or all of your property, and receive a lump sum or income benefits and a guaranteed lifetime tenancy.
The proceeds from a home reversion sale will be less than the market value. This is because the reversion provider cannot predict when it will receive any financial benefit.
You can remain in the house rent free (or for a minimal nominal rent) for the rest of your life. When the property is sold, usually after your death, the reversion provider receives a proportion of the proceeds from the sale, depending on what share of your home you sold. For example if you sold 50% of your home to the reversion provider, they will receive 50% of the proceeds when it is sold.
Advantages of a home reversion plan:
- Home reversion plans offering a one-off lump sum could provide a substantial amount to spend as you wish
- There are no ongoing repayments; the reversion provider receives its profit when the property is sold
- You will know the share of your home’s value that you will be leaving to your family
- You continue to benefit from any rise in the value of your property, providing you have chosen to keep a share
- You can take extra cash advances, providing there is enough remaining equity in the property.
Disadvantages of a home reversion plan:
- If you have sold all of your home to the reversion provider, you will not gain from any increase in the property value
- A home reversion plan could reduce the value of your estate for inheritance
- In the event of your early death you could have effectively sold your home for little benefit
- When you sell your home to the reversion provider, you will not receive the full value compared to selling on the open market. This is because the reversion provider gives you the right to live in your home for the rest of your life.
- There may be restrictions on whether someone can move into your property once you have taken out a home reversion plan.
This is a home reversion scheme. To understand the features and risks of a home reversion plan, ask for a personalised illustration.
If you want more information on equity release, a lifetime mortgage or home reversion plan, please call us on 0800 328 8432 or complete our enquiry form.
Registered office: 31 Goldington Road, Bedford, MK40 3LH.
Hinton & Wild Ltd is authorised and regulated by the Financial Services Authority under FSA No. 438338.
Hinton & Wild Ltd is a member of the Home & Capital Trust Group.
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