Reversion schemes
A reversion scheme involves selling a percentage of a property to a reversion company for a fixed amount. In some cases this is easier to explain. Homeowners will receive a certain amount of the value of the property sold depending on their age. When the property is sold, the reversion company receives the same percentage of the sales proceeds, which was originally borrowed against the value of the home. These are the oldest forms of Equity Release dating back to the 1960s.
Reversion schemes
A reversion scheme involves selling a percentage of a property to a reversion company for a fixed amount.
Homeowners will receive a certain amount of the value of the property sold depending on their age. When the property is sold, the reversion company receives the same percentage of the sales proceeds, which was originally borrowed against the value of the home. These are the oldest forms of Equity Release dating back to the 1960s and if house prices increase, the value of the equity share given away at outset, increases alongside.
Generally, we do not recommend reversion schemes, preferring to suggest clients look at a Lifetime Mortgage or Home Equity Release Scheme, which is merely a mortgage where all Interest and Capital repayments are postponed and "rolled-up" becoming repayable upon death or in the event of Long Term Care being required.