A home reversion plan is an arrangement where the following conditions are met::-
The plan provider buys all or part of a qualifying interest in land (other than time share accommodation) in the UK from an individual or trustees
The seller is entitled to occupy at least 40% of the land as a dwelling
The arrangement specifies one or more qualifying termination event at which point the arrangement will end.
A qualifying termination event is where:-
· The person becomes a resident of a care home
· The person dies
· The end of a specified period of at least 20 years, beginning with the day the seller entered into the arrangement
A home reversion plan is different than a life time mortgage. The differences are as follows:-
The homeowner transfers ownership of some or all of the property to a company in exchange for a cash sum or an income
No interest is paid to the company
The original owner retains the right to live in the house until death
On death, the property (or part of it) reverts to the company which is where the term ‘home reversion’ comes from.
If you have any questions regarding this article or others like it, please feel free to contact Solution Mortgages on 0845 123 1260 or visit us online at www.solution-mortgages.co.uk