How does Equity Release work?
As an owner-occupier, you sell all (known
as a “Full Home Reversion”) - or part (known as
a “Partial Home Reversion”) – of your home
to an investor (referred to as the “Home Reversion Provider”)
in return for a lump sum. In addition to the cash released,
you have the right to continue to live in the property for
the rest of your life or until you enter long term residential
care.
Subject to certain conditions, you can even
move to another property of your choice if you want to. On
your death (or the death of the surviving partner for jointly
owned properties), the lease comes to an end and the property
may be sold by the Home Reversion Provider. If you have taken
out a Partial Home Reversion Plan, the retained portion becomes
part of the deceased’s estate in the usual way. The
Home Reversion Provider is also entitled to sell the property
if you enter long term residential care.
In the case of a Partial Home Reversion,
and unlike a lifetime mortgage, the value of the portion that
you retain cannot be eroded by interest charges and its value
is subject to fluctuations in the housing market so that,
in a rising market, the value of your retained share would
grow. Home Reversion Plans are transparent and flexible -
you specify what proportion of your home you wish to sell
at outset and this will never change, unless you choose to
release further equity in the future.
Why choose Neville James Equity Release?
Neville James is able to arrange Home Reversion
Plans with a range of Home Reversion Providers, each of whom
is willing to look at different property circumstances and
requirements. This means that, in addition to offering competitive
rates for traditional properties, we are able to deal with
more unusual scenarios which other product providers/arrangers
might decline.
Neville James Limited is authorised and
regulated by the Financial Services Authority (“FSA”)
to arrange Home Reversion Plans. This means that you are fully
covered by the Financial Services Compensation Scheme in relation
to our activities and have access to the Financial Ombudsman
Service should a problem arise which cannot be resolved between
us. For peace of mind, the Home Reversion Providers we use
are partnerships and companies who are experienced in the
Home Reversion market, all of whom are also authorised and
regulated by the FSA. All transactions are arranged through
authorised intermediaries who will ensure you receive appropriate
financial advice before entering into a Home Reversion Plan.
Neville James Equity Release can select
a Home Reversion Provider who is a member of Safe Home Income
Plans (SHIP), a company supported by the leading providers
of home income and equity release plans which is dedicated
to protecting those who take out Home Reversion Plans. The
Home Reversion Providers who are members of SHIP must observe
a Code of Practice outlined below:
- To provide a fair, simple and complete presentation of
plans;
- To ensure that the customer’s legal work is performed
by the solicitor of his/her choice, who will be required
to sign a certificate to confirm the scheme has been explained
in full;
- To state clearly the main cost to the householder’s
assets and estate;
- To carry a “no negative equity guarantee”
(you will never owe more than the value of your home).
Neville James understands that many people
choose to take out a Home Reversion Plan to supplement their
income and therefore to help, we do not charge any up front
valuation or administration fees, unlike many Home Reversion
Providers/Arrangers. We ask you for a contribution towards
the cost of the valuation, which will be refunded at completion.
For properties valued at £500,000 or less, the contribution
is £95.
Benefits of a Home Reversion
Flexible
You decide exactly how much of your property you wish to sell,
Neville James will not insist you release a minimum amount
or indeed sell the whole property.
Make your equity work for you
If you choose to make some home improvements with the cash
you release, we can arrange for your property to be valued
on the basis of the amount it will be worth AFTER the work
has been completed, allowing you to release additional funds
if you wish.
Inheritance Tax Planning*
By selling a proportion of your home, you can ensure that
the value of the part retained falls within the nil rate band.
If the value of the retained part increases, you may be able
to sell more in the future.
Life without worry
Live in your home without any further home finance payments
– no rent (except existing ground rent charges for leasehold
properties) or interest payments apply. In some cases a nominal
rent (currently £10pa) is payable.
Best of both worlds - in the case
of a Partial Home Reversion:
You can still potentially benefit from any future rises in
the housing market in relation to the percentage of your home
you retain. Have the peace of mind of knowing that you will
still be able to leave part of your property to your loved
ones. With a Home Reversion Plan, there is no need for a negative
equity guarantee as the percentage of your home you retain
cannot be eroded by interest charges.
*please seek advice from your Financial Advisor
This is a Home Reversion Plan. To understand
the features and risks, ask for a personalised illustration.
A Home Reversion Plan is a complex property
transaction. You should seek legal advice to ensure that you
fully understand all of the implications for you and your
home and for anyone who might otherwise inherit the property.
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