With a home reversion scheme you agree to sell all or part of your home to a reversion company. Some reversion companies buy the home, others merely act as agents for one or a whole range of buyers. You get the sale proceeds as a cash lump sum.
Some schemes allow you to do what you like with the cash; others insist it is invested in a fund or other vehicle, to give you a regular income.
As the buyer cannot sell or do anything else with your home until you and anyone else legally entitled to live in your home, have died or moved into a care home, you will get a lot less than the market value.
Critics of the concept of the product argue that if all you get is a typical 35 or 45 per cent of the value of your home, you may as well sell it yourself.
The older you are when you take out a home reversion scheme, the higher the percentage of the true value you will get.
You get a lease entitling you to live in your home for the rest of your life
You sometimes have to pay rent.
You remain responsible for maintenance.
If you die soon after taking out a new scheme, the reversion company gets a good deal and you a bad one.
The more of the home you sell, the less you benefit from rising house prices.
How much you get depends on the valuation of your home.
How much you get also depends on how much of your home you sell.
In recent years home reversion schemes have had a bad press due to unscrupulous companies and sales people taking advantage of often infirm elderly people who had not realised how much their home was really worth.
Some companies will allow independent valuations; others like to use their own ' tame ' valuer.
Some companies only deal direct, others will work only via financial advisors.
