Home Reversion Schemes

The home reversion schemes let you sell some or whole of your property to a lender company. They give you a lump sum amount, per month income, or both.

You are not required to pay any sort of interest on the loan but the lender company will take certain percentage of the value of the house when it will be sold. This percentage is calculated depending on various factors, including your age. The older you are, the more money you will get.

Technically, when you sell a part or whole of the property to a company, you become a tenant in your own house. However, you still have to be responsible for paying the bills and property maintenance. You can live as a tenant in your house the rest of your life under this home reversion scheme.

Reversion Scheme Types

The policies vary from company to company and there aren’t any standards set for home reversion. The competition in this field is increasing day by day and new ideas along with different kind of schemes are offered to people frequently.

It is really important for people who want to avail home reversion scheme to do some proper research before going for one. Search for different companies and pay special attention to the cost and terms and conditions of each one of them.

Advantages

• No partial payments to the company, the reversion company takes all its money back when the property is sold.

• You know what part of your home you are leaving behind for your family.

• You continue to share in any increase in the worth of your property (except you have sold its complete value).

• You may take additional cash advances, reliant on the sum you initially took.

Disadvantages

• The company will purchase at a lower cost than its original market value.

• The huge discounts at which the reversion company will want to purchase make the scheme less appropriate for people over 60 years of age. Normally, you do not get the complete market value of the property you have sold because the reversion company allows you to live in the same house without paying anything for the rest of your lives, therefore the younger you are the more time it will take for the home reversion company to get their money back.

• If you die right after taking a scheme, you could have effectively sold your home in much better price. However, some schemes give some money back if you die within a specific time period of taking the scheme.

• Reversion companies are at times very picky about the homes they take.


For information, help and independent financial advice on home reversion schemes call our specialist team of advisers or visit http://www.retirementsolutions.co.uk/equity-release/home-reversions