The LV= Flexible Lifetime Drawdown Mortgage is a drawdown scheme that offers homeowners an overall cash facility from which they can withdraw an initial capital amount for immediate use, with any unused cash element remaining with the lender. No interest is charged on these cash reserve facility funds, only on any capital actually withdrawn.
The LV= drawdown mortgage scheme is suitable for homeowners needing a specific cash lump sum from the outset, but with an option for still having access to a future cash pot in the future. These additional withdrawals can be in as smaller amounts as £2,000 a time and attract no further administration charges.
To start a drawdown equity release loan with LV=, the minimum initial amount that can be taken is £10,000. The total loan (initial lump sum + drawdown facility) can only be a maximum of 3 times the initial loan. Therefore, if £25,000 was taken upfront, then the maximum drawdown facility permitted would be a further £50,000. This can be reviewed again in the future should additional financial needs arise.
The USP for the LV= Flexible Lifetime Mortgage is the 15-year guaranteed cash reserve facilty. Therefore, the maximum equity release loan calculated at inception is guaranteed for 15 years & cannot be withdrawn unlike every other equity release scheme. Thus, if drawdown was of high importance then the LV= plan should be a major consideration.
LV= offer a free valuation upto £1,500,000. However, for properties valued higher this can be referred to LV=, hence please contact the Equity Release Supermarket team directly on Freephone 0800 678 5955 for properties over this figure.
This drawdown lifetime mortgage comes with a fixed lifetime equity release interest rate on the initial lump sum which is charged annually. Future cash withdrawals would attract the interest rate applicable at the time of each withdrawal.
LV= are members of the Equity Release Council, hence their plans incorporate the no-negative equity guarantee. This means that following sale of the property on death or long term care, the beneficiaries cannot be left with a debt owing to the equity release company.
For joint applicants there is an added protection feature for the remaining survivor of the plan. Should one homeowner die or move into care, the surviving partner has the option to repay this lifetime mortgage back to LV= within 3 years of this event with NO penalty.
Early repayment charges are always an important feature of any equity release mortgage. LV= are one of the few companies to offer a fixed early repayment charge strategy. For the 1st 5 years of the loan period, LV= would charge 5% of the capital repaid, the next 5 years it would be 3%, with NO penalty after the 10th year.
Therefore, if a fixed penalty early repayment charge is required, with low interest rate and a flexible borrowing facility, then LV='s Second/Holiday Home Flexible Lifetime Mortgage should be considered.