Historically, an equity release home reversion scheme has been a rigid instrument of finance whereby flexibility was not the key to its previous success. They work by selling a percentage of your property to the home reversion provider, in exchange for a cash lump sum. Because it is not a loan, home reversion does not involve interest or monthly repayments. Home reversion plans have declined in popularity in recent times. While there were eight home reversion providers in the market in 2007, there are currently only three providers for these schemes – Hodge Lifetime, Newlife Mortgages, and Bridgewater.
All the home reversion plans available allow you to release equity from the house by transferring ownership in full or part to the provider, while retaining the right to live in the home until you die or move into care. While the basic structure or concept behind each of these plans remains constant, each plan also has its own unique features. When compared with the other two plans, the Bridgewater Flexible Release Plan currently seems to be the most flexible home reversion option available.
They have a wide range of release options – allowing you release from 25% to 100% of the property value in exchange for a cash lump sum. The maximum release percentage in Scotland is 99.9%. The minimum applicant age for the Bridgewater flexible release plan is 65 years, and in the case of joint applicants, the youngest applicant’s age must be 65 years or over.
This plan is flexible in that it allows customers to tailor the amount they release to suit their needs, while ensuring that a satisfactory portion of the equity is left for their beneficiaries, or for future cash releases if needed. The amount you get in exchange of the percentage depends on the percentage released, age of the youngest applicant and of course, valuation of the property.
There are different parts to the Bridgewater home reversion plans – secured escalating release and maximum release. Secured escalating payment plans allow you to set up guaranteed increasing payments every year for a maximum of 15 years, in addition to releasing a cash lump sum now. It is designed for those who want to retain ownership in their property and protect their inheritance, while also having more control on how much equity they release. Maximum release is designed for those who want to release all the equity in the property. Both plans are ERC approved, and come with a no negative equity guarantee.
Bridgewater’s home reversion plans are also more flexible in that they are more accessible, being available in England, Wales, as well as mainland Scotland.
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