Reversion plans involve selling all or part of your property so as to receive a lump sum payment or regular monthly payments throughout your life. When your home is sold if you go into a care home or when you pass away, the home reversion company will receive a share of the sale. So if you only sold a part of your home then the rest can go towards any inheritance you want to leave for your family.
How do I know if a home reversion plan is right for me?
A home reversion plan should never be a decision made lightly. That’s why you should consider a few pros and cons before settling on a home reversion plan:
|You can keep your home until you pass away or go into permanent care||You’re won’t be the sole owner of your home|
|You get a regular income or a lump sum to cover your living costs||You still need to account for council tax, utilities, phone and internet|
|Any equity released on your primary property is tax-free||You’ll need to set aside money for repairs and maintenance as lenders require you to keep your home in good condition|
|You may be able to reduce your Inheritance Tax liability||The inheritance you pass on to your loved ones may be reduced and it won’t include the property|
|You won’t need to go through the stressful process of moving home|
|You could use your reversion plan as a regular income to cover your care costs|
The pros and cons list is not exhaustive, but it gives you a good idea of what to expect from a home reversion plan. We highly recommend seeking expert legal advice before you agree to any financial plan. Call us on 0800 614 722 to speak to an advisor.
How much will I get?
A home reversion plan can secure anywhere between 20% and 60% of the current value of your property. The amount also depends on your age and the condition of your health. If you’re aged 70 or over, your chances of securing a higher amount are increased as the home reversion company can only sell the home if you go into a care home or when you pass away.
How much does a home reversion plan cost?
A home reversion plan does come with a few fees. You may have to pay:
- Lender arrangement fee for the lifetime mortgage
- Legal fees
- Valuation fees
- Completion fee
- Buildings Insurance
- A fee to your equity release advisor
You can either arrange for the completion fee to be added to your home reversion plan or for it to be paid at completion.
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