Home Reversion plans – a new idea for your home
Home reversion plans allow you to turn your home into money while still letting you live there. Sure, it sounds a lot like a reverse mortgage, but the two are not the same.
A home reversion plan allows you complete control over how much of your home you sell and just how much the bank owns. That’s right: a home reversion plan is not a mortgage! A home reversion plan is just you choosing to unlock some of the money in your home by selling just a little of it on your own terms. You can sell as much or as little as you like and can always sell more if the value of your home goes up and you wish to unlock more money. In contrast, a traditional reverse mortgage is still a mortgage and the bank will own your home just like with a mortgage.
The problem with all mortgages, even a reverse mortgage, is that it will need to be eventually repaid. If you die or decide to move out of your home, you, your family, and your estate will have to repay every penny you received from your reverse mortgage. Making things even worse, a reverse mortgage counts as a lien and is subject to interest rates which means that over time the money you got out of a reverse mortgage will blossom into having to repay more money than you got out of your home. If the fees and money from your reverse mortgage aren’t repaid, you or your heirs may lose your home.
The money that comes from home reversion plans, unlike with a reverse mortgage, never has to be repaid. There are no fees outside of the start-up fees, no taxes, and no worries about losing your home as reverse mortgage plans also come with an ironclad Lifetime Lease to let you and your family live there as long as you live. When you die your loved ones will inherit any portions of your home held by you in the form of a tax-free lump sum or payments. You home can never be sold from under you as long as you live and may only be sold after you are gone.
Even though the two may seem the same at first glance, a Home Reversion Plan is very different from a Reverse Mortgage and offers you another option for gaining money from your home.