Equity Release - Home Reversion Plans
Instead of a loan secured on your home a reversion provider buys part, or all, of your home.
In return for this, they will pay you a lump sum or a regular income at the start of the plan. This means that you become a leaseholder, which allows you to continue to live in the property with either no or a minimal rent (say £1 per month).
However because the money is provided to you upfront (and you continue to benefit from living in your home) you will receive a percentage less than the full market value.
The minimum age for a home reversion plan is usually higher than for a lifetime mortgage and the older you are when you take out the plan the higher the percentage you will receive.
Whatever percentage owned by the provider, you will remain responsible for the general maintenance and repairs of the property. The home reversion provider who has purchased all or part of your home will obviously benefit from any rise in the property value.
The plan ceases when you die or if you need to move into a care home. The provider company at that time will sell the property, once the sale has completed they will take their share, and once done they will pay the balance (which will include your designed percentage plus any appropriate rise in the value of your property) to you or your estate.