© Equity Release UK 2011 Welcome To Equity Release UK Freephone 08000 855613 Here to help you. Equity Release Home Reversion Plans Speak to a qualified Equity Release Advisor. Our friendly impartial advice can help you decide on the product suitable for you. You are under no obligation. AN EQUITY RELEASE PLAN WILL REDUCE THE VALUE OF YOUR ESTATE. EQUITY RELEASE WILL NOT BE SUITABLE FOR EVERYONE AND MAY AFFECT YOUR ENTITLEMENT TO STATE BENEFIT. TO UNDERSTAND THE FEATURES AND RISKS OF EQUITY RELEASE ASK FOR A PERSONALISED ILLUSTRATION. Equity Release UK is a trading style for website use only of Independent Debt Management Ltd. Independent Debt Management Ltd is an Introducer Appointed Representative to Personal Touch Finance Equity Release which is a trading style of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Services Authority. Fee statement - Personal Touch Finance Equity Release charge a fee of £995 payable upon completion of an equity release product Home Reversion Schemes A Home Reversion plan is where you sell your home or a percentage of it to a Reversion company but retain the rights to live in it rent-free for the rest of your life. The money received can either be paid out in a cash lump sum, a monthly income, or a combination of the two. Under a Home Reversion scheme you sell the legal ownership to a Reversion company and become a tenant. This is not a cause for concern because an iron clad legal document is signed, called a Lifetime Lease. This gives you the right to continue living in your property until you or your spouse dies (whoever lives the longest), or you have to move into long term care. However, even though you are only the tenant you will still be responsible for upkeep of the property and all associated bills and outgoings relating to it. The range of equity you could release is between about 20% and 60%. That means if your property is worth £100,000 and you sell 100% of it to a reversion company you'll receive between £20,000 - £60,000. This is because the reversion company cannot sell the property while you still live there. It may well be many years before the company can turn a profit. In effect a reversion company pays a discounted price for an asset which it can only be realised at an unknown future date. With this in mind it is important to understand the part health plays in a home reversion scheme. As a general rule (not a particularly comforting one), the older and less well you are, the more cash can be raised. Advantages Of Home Reversion Plans Disadvantages Of Home Reversion Plans Disadvantages Of Home Reversion Plans • The most expensive option - according to research done by the financial services consumer panel, which advises the FSA, home reversion plans were found to be the most expensive option in almost all circumstances. To quote from their research - • 'in most cases the odds clearly favoured selling up and downsizing although in some cases a lifetime mortgage did work out to be better value' • Won't receive full value for your home - The reversion company will only pay around 20% - 60% for the value of your property • Can't move home - Home reversions are not portable so if you want to move houses at a later stage your property must be sold and the reversion company will take its money. Lifetime mortgages however are generally portable • Early death - if you were to die soon after taking out a plan you have effectively sold a share or the full amount in your house on the cheap. However, some home reversion schemes give families a rebate should you die within the first few years of signing up • Your State benefits might be affected - Cash received from a Reversion scheme could seriously alter the amount of benefits or state support you're able to collect. It is critical to research this matter further with an adviser • Might increase the income tax you pay - Although the original cash is paid out tax-free if you use this money to generate an income further tax might have to be paid • Restrictions on your home - With some Reversion plans you will have to tell the company if your circumstances change. Perhaps you let a friend or lodger live with you. They might be forced to sign a document to waive their rights to live there should you die. Also, you might not be allowed to leave the property empty for more than 6 months • General upkeep expenses - You will be liable for general upkeep of the property. If this is not done to a satisfactory standard the reversion company might carry out the work and invoice you. Think hard about this if your property is old and is likely to require ongoing maintenance • Moving into long term care can cancel the contract - With some schemes if you have to move into long term care the contract is terminated and the house will be sold • Have to be over 65 - in most cases home reversion plans are available only to those aged 65+ • Poor value for 'younger' pensioners - because of their increased life expectancy. For example a 65 year old might only receive 30% of the value of their property but in they were mid 70s this might rise to 45% or more • Selected properties only - the home reversion provider will prefer properties that are both in good condition and easy to sell. If your property is neither it might be hard to strike a deal • You become a tenant in your home - When you sign up you have to transfer legal ownership to the Reversion company although you are granted a lifetime lease which enables you to continue living there until you or your spouse dies, whoever lives the longer. Back To Top. Advantages Of Home Reversion Plans • No monthly payments to make - You won't have to pay a single penny of repayments • No interest to pay - A home reversion plan is not a loan, so there is no interest to pay. Other Equity Release plans such as Lifetime mortgages not only charge interest but this is compounded. This means that as interest is charged on interest the amount can grow extremely large over the years and in extreme cases can be more than the value of the property • You control what portion of the property is left to your beneficiaries - If you sell 50% of your property to a reversion company, you know that you retain control of the remaining 50% and can leave this to any beneficiary. However, if you take out a Lifetime mortgage any final percentage will not be known until you die • Benefit from an increase in property values - If the property market rises you get to share in this - unless you have sold its entire value • More cash can be released than with a Lifetime mortgage - Generally speaking more cash can be released with a reversion scheme than with lifetime mortgages • Can increase the percentage sold - For example if you initially sold 15% of your house you could sell another 10% or more at a later stage to generate extra cash • Bad health is an advantage - On one hand being in good health is an obvious advantage but for reversion schemes if your medical conditions are both serious and can be certified the Reversion company will probably pay you more, ie it will release say 40% of the property's value instead of 35% • Regulated by the FSA - Always good to have a financial product regulated and monitored by the financial regulator, the Financial Service Authority (FSA). Back To Top.

Equity Release UK for equity release home reversion plans, drawdown mortgages, lifetime mortgages, home reversion plans and equity release calulators