A home reversion plan is an equity release scheme that gives homeowners the opportunity to sell their property or a part of it in order to obtain money that they can spend on whatever they want. A home reversion plan allows homeowners to remain in their home although they have transferred the legal title of their home to the home reversion provider. They are free to remain in their home rent free until they pass away or until they are no longer capable of taking care of themselves.
A home reversion plan is portable. This means that if for any reason homeowners need to move to a new home, the plan can be transferred to the new home as long as the new home is eligible. One of the advantages of a home reversion plan is that homeowners are not required to sell their entire property. If they sell just a part of it, they can leave the other part as an inheritance for their family.
The home reversion plan is not one of the most popular equity release schemes due to the fact that the property is sold for less than its market value. The home reversion provider purchases the property for a lower value as a form of compensation for allowing the homeowners to continue to remain in the property. If the homeowners would like to buy back the share of their property that they sold, they will have to pay the full market value. So they still end up losing.
Aviva is one of the best known & trusted equity release provider. Aviva has been providing home reversion plans as well as lifetime mortgages to homeowner over the years via Grainger PLC. However, they have now decided to withdraw its home reversion plan with immediate effect.
Most people choose the home reversion plan because it provides them with the option of being able to leave an inheritance. This option is now being included in the roll-up lifetime mortgage schemes of Aviva which is why it has decided to no longer place emphasis on the home reversion plans.
When homeowners are considering equity release, it is advisable for them to involve their family in the decision process as any decision will impact on their eventual inheritance.