The Types of Home Reversion

The Types of Home Reversion

The Types of Home Reversion

Home reversion is when you sell your home or part of it to a Reversion company but are able to still live in your home, without paying rent for as long as you live. The money that you receive from a home reversion plan is given to you as in a monthly income, a lump sum or a combination of the two.

The reversion company that handles your home will not be able to sell your home until you or your spouse dies or if you go into a nursing home for long term care. What this means for you is that you will not receive the full value of your home because the reversion company may have to wait years before selling the property and making a profit.

In addition, when you sell your home to a reversion company you become a tenant and with this agreement comes a Lifetime Lease. What this means is that you have the legal right to live in your home until you die. But, being a tenant means that you are still responsible for the maintenance of the property and all bills and responsibilities that go with it.

Advantages of a home reversion are: no monthly payment, you have control over the property that is bequeathed to beneficiaries, pay no interest, enjoy a beneficial increase in property values and receive more cash than a lifetime mortgage.

Some disadvantages to the home reversion plan are: you won't receive full value you're your home, state benefits may be affected, you won't be able to move home and the process may increase your income tax.

Equity release, also known to some as home reversion, is when money from a lender is taken from a homeowner's home and property without moving out of the property. It is the main purpose of equity release to raise money for the homeowner, so that the homeowner can use the money for specific needs. Seniors often use this method to purchase another home or help with medical bills. However, when under home reversion, the homeowner cannot purchase another home. The money must be used to help with medicals bills or other personal needs.

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