If you are a pensioner who is looking for an additional source of income, you can choose to apply for a home reversion plan from one of the main providers such as Bridgewater, Aviva, New life Mortgages. A home reversion plan makes it possible for you to sell all or a portion of your property to a home reversion company. As a result of selling your property, you will receive a lump sum cash amount, a monthly income or a combination of the two.
Why would you want to sell a part or all of your property especially in your retirement period and where would you live? Well, the money that you get from selling your property is tax free and can be used for any purpose. The home reversion company will allow you to remain in your home even if you choose to sell the entire property. You can stay in your home until you die or until you choose to move into long term care.
There are many other advantages of a home reversion plan. If you are 65 years or older, you can apply for a home reversion plan without having to worry about repayment during your lifetime. Since that you are allowed to sell a part of your property, you will benefit from any increase in the property market for the portion that you still own and you will have an inheritance to leave behind for your children or grandchildren.
A home reversion plan does have a few disadvantages. If you sell a portion of your property, you are decreasing the amount that you will leave as inheritance. If there is an increase in the property market, you will not benefit in any way for the portion that you sold. Unlike other forms of equity release, you cannot repay a home reversion plan. Once you sell a portion or your entire property, it is sold.
One of the major disadvantages of a home reversion plan is that the home reversion company will be purchasing your property for a price that is lower than the market value since that you will be allowed to live in your property even though you sold it to the home reversion company.
