How home reversion equity release schemes work

 

With a home reversion you:

  • sell all or part of your home to a reversion company or an individual.
  • no longer own your own home but continue to live in it as a tenant of the reversion company or individual.

The home is sold when you die or move out.

 

 

How do you get your money under a home reversion scheme ?

 

You will normally get your money as a cash lump sum to use as you wish, but if you prefer an income there are several options:

  • You can purchase an annuity or other investment to provide a regular income and some reversion companies schemes will provide and arrange this for you.
  • your scheme may provide an income that is not linked to an annuity or investment
  • your scheme provider may offer small regular cash lump sum payments as and when you want them, known as drawdown.
  • some scheme providers offer a lumps sum payment and additional regular drawdown payments later on.

 

 The minimum age for home reversion equity release schemes is usually higher than for lifetime mortgages. You also usually get a lease giving you the right to continue to live in your home until you die or no longer need it.

Usually you do not pay rent or it will be a token amount though with some schemes you can choose to pay a higher rent in exchange for more money from the sale.

Once the home reversion scheme has started the buyer of your home benefits from any increase in its value, but if you have only sold part of it you will benefit from any rise in value of your remaining part.

 

 

 

The content of these website pages regarding equity release schemes are intended for information and general interest only and should not be taken or construed as advice. Equity release schemes are complex and you should always consider taking professional advice before committing.

 

Thanks go to "Moneymadeclear" for some of the content on this website about equity release schemes.

Moneymadeclear(tm) from the UK's Consumer Financial Education Body (CFEB). When it comes to your money, their impartial information and tools can help you work out what's right for you.

 

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