A Home Reversion is another type of equity release, just like Lifetime Mortgage. The main difference is that while your property is mortgaged in a lifetime mortgage, it is sold outright in a home reversion.
While the property is sold, or legally transferred to the reversion company, you still retain the rights to live in the house, rent-free. This arrangement often seems dubious or full of loop holes to many people, but it’s completely legal and transparent and you will have documents underlining your right to live in the house till you and your spouse die or move into long term care.
When you sell the house to the reversion company, they offer you anywhere between 20-60% of the property’s value as a lumpsum or in periodic installments. The property is sold by the owners when you leave, and the proceeds remain with them.
Another difference (and also an advantage) with a home reversion is that you can sell only part of the house – like 30% or 50% of it. Accordingly, your beneficiaries get the remainder of the proceeds from the sale.
How much value you receive out of your house depends on the real estate market, as well as your health and age. With the help of a financial advisor you will be able to determine if this is the right investment for you, and also negotiate a good deal.