LV= was founded in 1843 as the Liverpool Independent Legal Victoria Burial Society. It is one of the oldest financial companies still in existence. Their products have changed from burial assistance to include lifetime mortgages.
LV= Flexible Lifetime Mortgage is one option provided to UK residents. Any homeowner of qualifying age is able to access a drawdown lifetime mortgage. Using this scheme, homeowners have access to a reserve facility to continue withdrawing funds as required.
Features and Benefits of LV= Flexible Plans
The product works by offering a beginning lump sum for the first year. This sum is set at a minimum of £10,000. Clients can elect to increase the initial amount based on their needs and the maximum amount available for the equity release. Any further withdrawals from the reserve facility also need to meet a minimum sum of £2,000 per withdrawal and incur no further admin costs such as valuation etc.
Applications are required to be 60 years of age or older. In the case of joint applicants the youngest homeowner must meet the minimum age. A minimum property value of £100,000 is required for this plan. The more value in the property, the more funds are available for equity release. LV= is the only equity release company that guarantees the drawdown facility for a full 15 years.
One major advantage of the LV= plan & which is currently unique to the equity release industry is its method of charging for early repayment. LV= has a fixed percentage penalty system if the loan is repaid early. This would be 5% of the balance repaid in the first 5 years, then 3% in the next 5 years & no early repayment charges after 10 years have passed. All other providers either use gilt or swap rates to calculate their penalties which could always be an unknown quantity.
Additional Notes for Drawdown Mortgage
As per UK regulations, the LV= flexible plan has a no-negative equity clause. It protects homeowners from roll up interest on the initial tax free sum and any further withdrawals. As a drawdown mortgage there is inheritance protection. Inheritance funds remain available as long as the homeowner does not take the maximum sum out of the cash facility.
In addition the initial interest rate is fixed for life. Any future withdrawals from the reserve facility will be at the rate applicable at that time, but will also be fixed for life thereafter.
LV= will also accept high property value subject to individual verification & also equity release loans over £1million. Therefore, should your request be for a large release of equity contact the team on 0800 689 3149.
LV= provides this mortgage for main residences and holiday homes. If it is used on holiday or 2nd homes, the loan to value percentage offered by the company is reduced by 10% accordingly. This does reduce the maximum equity release borrow capacity.
Repayment is required upon death. If the homeowner or both homeowners sell the home or move to long term care repayment must be made. There is a survivor clause, where the surviving homeowner can repay the loan back in 3 years without any early repayment fee.
Incentives for LV= Equity Release
Incentives include a free valuation, reserve facility that is guaranteed for 15 years and No early repayment charges after 10 years.