Advanced Mortgage Services Ltd
We provide Independent Advice from the Whole Market
Equity Release Risk Warning.
Lifetime mortgage, or home reversion plan.
Equity release may affect your entitlement to state benefits and could reduce the value of your estate. To understand the features and risks, ask for a personalised illustration.
Please think carefully before securing other debts against your home.
A Home Reversion Plan allows you to access all or part of the value of your property while retaining the right to remain in your property, rent free, for the rest of your life.
With a Home Reversion product the provider will purchase all or part of your house taking into account your age and your health and will provide you with a tax free cash lump sum (or regular payments) and a lifetime lease, guaranteeing you the right to stay in your property rent-free for the rest of your life.
There is no day-to-day interference and no restrictions on treating the house exactly as before; as a private home to live in freely. The percentage you retain in your property will always remain the same regardless of the change in property values, unless you decide to take further cash releases.
At the end of the plan your property is sold and the sale proceeds are shared according to the remaining proportions of ownership. With both a Lifetime Mortgage and a Home Reversion Plan it is possible to give a homeowner some certainty in their future finances.
With a Home Reversion Plan the client knows precisely what he/she has parted with and, equally, what has been ring-fenced for later use, possibly to leave in a Will. With some Lifetime Mortgages it may be possible to also ring-fence an element of equity. You can usually sell between 25% and 100% of your property to the provider, depending on the product, but the amount you get in return will be significantly less than that share of the market value. The actual amount will depend on your age – the older you are, the more you’ll get. For example, if you’re a couple aged 65 and you want to release £40,000 from a £200,000 property, you’d have to sell around 58%.
As the amount you get for the share you sell depends on your life expectancy, this is a particularly expensive way to borrow if you die within a short period of taking out the scheme. However, some providers give you the option of an ‘early vacancy guarantee’, which means that your estate is guaranteed to get a certain percentage of the property’s value back if you die or move into long-term care within the first four or five years.
Though all the schemes are portable, it could be even harder to move to another property with a home reversion scheme, as the provider owns a relatively large share of your equity.
Advantages of a home reversion plan
Disadvantages of a home reversion plan
Your home is at risk of repossession if you do not keep up repayments on a mortgage or any other loans secured on it and you should think carefully before securing any debts on your home
Home Reversion Plan
Advanced Mortgage Services Ltd is an appointed representative of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Advanced Mortgage Services is registered in England. Company registration number 4751565.
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