Equity release schemes are rising in popularity, especially when you realize that type of freedom that they can really give you. Instead of thinking that you have to leave the home that you’ve enjoyed for so long, you’ll be able to get a chunk of cash and be able to make retirement life a little more interesting and definitely more secure. This is to help you supplement your pension income as well as any other income that you might have coming in. A lot of people are looking into home reversion but since it’s not as talked about as the lifetime mortgage, they don’t know that much about it.
The reality is that there’s quite a bit that you’ll need to know about home reversion. The first thing is that it’s for a slightly older crowd than you might expect — 65 and older, compared to the lifetime mortgage letting you check it out at 55.
The money you free from your home is going to be tax free, which can help you actually keep things afloat during retirement. The basic concept of the home reversion scheme is that you are selling part of the value within your property for that tax free lump sum that we just discussed. The reversion company isn’t just going to take your percentage and leave you hanging. They will sign a contract with you known as a lifetime tenancy agreement. This lets you ultimately stay in the home for a long time.
Looking at your contract will be the key to making this work. If there’s a risk that you’re not going to live very long, you’ll find that the home reversion scheme isn’t going to be good unless you can get a minimum payment if you pass on earlier than expected.
You get to live in the home for the rest of your life, which is awesome. Unfortunately, people feel like this isn’t a good fit for them because they’re not going to own their property outright. Honestly, it’s a matter of figuring out where you are in life. In our opinion, we’d rather have the extra money.
It’s all about value as well. Every property is different, so it can be hard to figure out how much can be released from your property. Property values also go up and down, and you will need to pay to have the property appraised by an agent that’s mutually acceptable to both you and the reversion company.
You do miss out on the rising values of your property. However, if the housing market is in a big slump, you definitely can do well with a reversion scheme.
Talking with an adviser is the real way to figure all of this stuff out. Why not check it out today, while it’s still on your mind?