With a home reversion, you sell part or all of your home but are able to continue to live there until you die or move out. In return for the property you receive a lump sum, a regular income, or both.
Someone on a Home Reversion plan usually receives between 20% and 60% of the value of their home depending on factors such as age and health. It is lower than market value because the provider will allow you to continue living in the property until you die or move out either rent free or at reduced rent. Obviously, the age at which the scheme is put into place affects the amount a lender is willing to pay for the property as it may be many years before they will receive repayment.
As with all Equity Release schemes it is very important to get advice on whether the scheme is right for you. Please talk to us to find out more and ensure you get the advice you need.
As part of the advice process, consideration must be given to discussing proposed actions with family members given that the estate is likely to reduce in value. It is good practice to consider alternative means of raising capital such as downsizing, financial assistance from family members, the availability of grants and other forms of borrowing. Additional costs may be involved when entering into an Equity Release arrangement such as lenders arrangement, valuation and legal fees and these vary by lender. Once equity has been released, it remains your responsibility to maintain the property at your expense. Releasing equity from your home may affect any entitlement to state benefits.
It is essential that independent legal advice is sought prior to completing a release of equity from your property.