Best Home Reversion Quote (Jul 2022)
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A home reversion could be a great way to help you live your later life to the full.
By borrowing a tax-free lump sum1 you could be able to fund home renovations, help younger family members get on the property ladder, or simply keep your lifestyle in retirement.
How much you can borrow depends on a number of factors, including your age, the type of property you own, and its value.
How Do I Get a Home Reversion Plan?
- You have to get advice before deciding to get one.
- Check for plans that have a no negative equity guarantee, so you’ll never have to pay more than what your home is valued at on the completion of the loan.
- It reduces the value of your estate.
- The initial counselling is free with no obligation.
- The most popular form of equity release is a lifetime mortgage, which is a bond secured against your home. Note that you will still own your home.
Different Types of Home Reversion Plans
Although there are many different plans available, they can all be split into four categories of reversion mortgage schemes.
Lifetime Mortgage Loan
You release a lump sum from the value of your property, by taking out a mortgage secured on your property (provided it’s your primary residence) whilst retaining 100% ownership of your home. This amount, plus any interest accrued,4
(you can use to make repayments) is repaid from the sale of your property when you and your joint plan partner passes away or move to a facility for long-term care.
Drawdown Lifetime Mortgage
This works similar to Lifetime Mortgage but with a regular cash reserve/draw down options allowing you to withdraw amounts at a frequency you like up to a specified amount of years, or until the fund has been used up.
Interest-Only Lifetime Mortgage
You get a lump sum and pay a monthly interest on the loan, which can be fixed or variable, rather than allowing the interest to roll up. The amount you originally borrowed is normally settled when your home is eventually sold.
Home Reversion Plan
Here, you sell some or all of your property to a home reversion provider in exchange for a lump sum of money or routine payments, whilst keeping the right to keep living in your home, rent free, while your still alive, but you have to agree to retain and insure it. At the end of the plan your property is sold and the sale proceeds are shared according to the residual proportions of ownership.
Common Home Reversion Uses:
- To supplement your pension income to cover living expenses
- To settle a repayment mortgage or clear the balance on an interest-only mortgage
- To improve your standard of living
- To see your family enjoy their inheritance while you’re still here
- To carry out some home improvements
- To take that holiday of a lifetime
- To help your children onto the property ladder
- To pay off other outstanding debt5 and lower your monthly outgoings.
A home reversion3 is a way of opening the wealth tied up in your property without the need to move.
With home reversion products, if you are over the age of 55, you can either borrow against the value of your home or sell all or part of it for a regular monthly income, a lump sum, or the facility to get at equity as and when you like or a combination.
Home reversion plans are not right for everyone and it’s important that you fully consider your options and receive independent financial advice before making a decision. It’s also important that, if you do decide to use a home reversion product, you choose one that meets your needs.
Remember that taking a home reversion is generally a long term option. However, there are flexible plans available that may fit your varying needs and some will allow you to repay in the future without any penalties. A financial adviser can help you to pick the plan that is right for you.
Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.
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