Home Reversion Plans
What is a home reversion plan?
A type of home equity loan
Always seek professional, independent financial advice
With a home reversion plan, you sell all or part of your house to a home reversion company and receive a cash lump sum. You continue to live in your home for little or no rent until it is eventually sold.
Remember, your home may be repossessed if you do not keep up repayments on your mortgage.
About the cash lump sum
You can do what you like with the cash lump sum you receive from the home equity credit scheme. With some home reversions, part or all of the cash lump sum is invested in an annuity providing you with a regular fixed income for life. You can of course do this yourself.
Continue to live in your own home
Even though you have sold all or part of your house, you will normally be given a lease whereby you continue to live in your home until it is sold. You will either be able to live in your home for free, or be required to pay a nominal amount of rent. Always read the terms of a home equity loan to make sure you understand the conditions of it.
How much home equity credit will you get?
You will receive less than the market value of your house because the buyer will not get their money back until the house is sold. This kind of home equity loan is more suited to older people and generally there is a higher minimum age for home reversions compared to lifetime loans.
How much will the balance on the home equity loan be?
If you have sold part of your house and its value rises, you benefit from this extra money when the house is eventually sold. If you sold all of your house and the value of it rises, the buyer benefits from the extra value.