A home reversion is the sale of some or all of your property at a discount to its full market value. The provider of the funds, the reversion company, will not charge interest and will rely on repayment of the amount which they have advanced until the property is sold, usually following death (or for joint owners the death of the second of you).
The reversion arrangement will either provide a one-off lump sum or a series of regular payments and are only available to older customers usually aged 60 or more. The maximum amount available will increase with age and providers will often advance higher amounts to those customers who have a history of medical problems.
All plans approved by the Equity Release Council provide a right to remain in your property for the rest of your life or until you move to long-term care. For joint ownership, this means for the life of the second to die or the second to move into long-term care.
The home reversion plan also provides a right to move to another property, subject to the new property being an acceptable security to the lender.
Home reversions provide a no negative equity guarantee. When the property is eventually sold if there is a shortfall between the amount advanced and the sale price achieved, the lender will write off the difference.
Michael Forward Financial Services Ltd is a member of the Equity Release Council and is authorised and regulated by the Financial Conduct Authority. FCA No: 630157
If you would like further information regarding a home reversion or would like a face-to-face meeting with a qualified equity release advisor please click here and complete our enquiry form.
Equity release may involve a lifetime mortgage or a home reversion plan.
To understand the features and risks, obtain a personalised illustration from a professionally qualified advisor. Although you do not pay rent, you no longer own 100% of your home. Your estate will miss out on some share of any house price growth. The percentage of your home is sold for less than the market value. It can be difficult to reverse the deal once it has been made, as you are selling part of your home. A home reversion plan will reduce the value of your estate and may affect your entitlement to state benefits. If you pass away soon after taking out the plan, you have effectively sold your property cheaply. However some plans have provisions in place so that you are protected.
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