Reversion Plans

Unbiased Advice on Lifetime Mortgages and Reversion Plans
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Equity Release (General Info)

Lifetime Mortgages

Reversion Plans

S.H.I.P.

Inheritance Tax

Whole of Life Ins.

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Download the FSA's brochure on Equity Release here:

Equity Release: Reversion Plans

Reversion Plans

Under a reversion plan, home owners over 65 may sell a part or all of their home at the outset to the reversion company. The reversion company applies a discount against the current value of the property, to compensate them for not taking possession of their portion of the property until years later. Because this period of time is an unknown factor, the discount may reflect a fairly wide margin in the reversion company’s favour. As such, there is a risk of the owners receiving a poor return under these schemes if they die or go into a care home within a few years of its inception.

The main features of Reversion Plans are:

	Part or all of the of the home is sold at the outset.
	A valuation of the property is necessary and a fee for this is payable, together with solicitors costs
	Once in place, a reversion plan should be considered irrevocable.
	You will be able to live in your own home as long as you wish.
	There are no restrictions on how you spend the money.
	There is no maximum age limit
	The reversion company take possession of their share of the house after death (second death if joint borrowers), or after the (second) borrower permanently moving into a care home. Typically the house will then be sold.

The equity release products may involve lifetime mortgages or home reversion plans. If so, to understand their features and risks, ask for a personalised illustration.

The following tables give an idea of the amounts offered on a property valued at £200,000, for a given age of vendor:

- Source - Hodge Equity Release Shared Growth Reversion

	% of property sold
single male	90%	50%
Age 65	£78,970.00	£44,605.00
70	£86,725.00	£48,923.00
75	£94,855.00	£53,452.00
80	£102,973.00	£57,968.00
85	£111,607.00	£62,780.00

Single Female	90%	50%
Age 65	£71,885.00	£40,657.00
70	£79,839.00	£45,087.00
75	£88,690.00	£50,020.00
80	£98,059.00	£55,244.00
85	£107,613.00	£107,613.00

Joint Male/Female	90%	50%
Age 65	£61,937.00	£35,120.00
70	£70,987.00	£40,159.00
75	£81,766.00	£46,174.00
80	£90,442.00	£51,009.00
85	£99,457.00	£56,034.00

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Financial Elite Limited is registered under the Data Protection Act 1998.

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