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Equity Release - Home Reversion Plans
Equity release is a way of unlocking the value of your property, without having to sell it or move home. One way to do this is to sell part or all of your property to a specialist home reversion company for a regular income or one-off cash payment.
These financial products are known as Home Reversion Plans and allow you to live in the property until you die or move into a nursing home in return for either a monthly income or a lump sum.
If you opt for a “full reversion”, the home reversion company owns your home outright, including any increase in value since the date of sale. When the house is sold, the proceeds are split according to the equity share owned by you and the home reversion company.
- With a “partial” Home Reversion Plan, you can leave the unsold proportion of the value of your property to your beneficiaries
- You sign away a proportion of any rise in the value of your property. In the case of a “full reversion” plan you sign away all of the increase.
- You will not get the full market value when you sell your property (or part of it) to a home reversion company. Typically, companies will only pay from 40 to 60 per cent of your home’s current value, sometimes less.
It is important to note that you cannot change your mind once you have taken out a Home Reversion Plan. You must make the right decision at the outset. So be sure to speak to one of our advisers first. We’ll make sure you get all the facts you need to make a proper considered decision.