Equity release schemes are the generic term encompassing all plans including lifetime mortgages & home reversion plans. They are potentially suitable for homeowners who preferably do not have a mortgage and have an income or lump sum requirement. If you are retired and want some money to enjoy your retirement then equity release is the best solution for you. By opting for equity release, you can unlock some amount of money against the value of your property without moving.
One of the best things about equity release is that it provides tax-free cash which can be used in various ways. This means that you can a buy a new car, go on holidays or pay of outstanding debts; more commonly credit cards & loans. There are different equity release schemes available in the market. One of the most preferred schemes is known as a home reversion plan.
What is a home reversion plan?
These schemes do not start until age 65, however I feel they only really offer preferential terms once the age of 70 has been attained. Under these schemes, you can sell a part or the whole of your property in return for a cash lump sum of money. Once you have opted for this scheme then your home or a part of it will belong to the reversion company. One of the two main advantages of home reversion schemes is that home reversion schemes allow you to live in your home for the rest of your life. The reversion company will grant you a lifetime tenancy which means you can live there rent free for the rest of your life. Additionally, because you are selling a percentage of the value of the house, then you are also guaranteeing the final percentage of the property that will pass to your beneficiaries. This is NOT the case with a lifetime mortgage scheme.
Advantages offered by home reversion plans
Once you receive money under a home reversion plan there is no need to worry about the repayments. This is because the lenders will get their share of the property value after your death & once the property is sold. Under this scheme, you can sell only a part of your property and keep the rest for your family or beneficiaries. This way, you can also benefit from the increasing value of the proportion of your part of the property. Home reversion schemes also tend to be cheaper in set up costs. The only fees with the major home reversion companies tend to be valuation & legal costs. Occasionally, Equity Release Supermarket do obtain free valuations as they do currently with Hodge Lifetime. Therefore, there would be no initial fees to pay on application & ALL costs would then be deducted on completion.
To obtain your guide to Home Reversion schemes, please contact the Equity Release Supermarket team on 0800 678 5159 or click here to register.