The LV= Drawdown+ Lite Lifetime 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 No interest is charged on these cash reserve facility funds, only on any capital actually withdrawn.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 £1,500 a time and attract no further administration charges.
The LV= Drawdown+ Lite 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.
For homeowner's uncertain about their future at the property & maybe considering downsizing in the future, LV= have added a potential early repayment charge waiver called 'Downsizing Protection'. Should any homeowner with an LV= Drawdown+ Lite equity release plan move to a new house after 5 years following commencement of the mortgage, and the property they intend to purchase cannot be ported across as it doesn't meet LV's lending criteria, then the loan can be repaid with NO penalty.
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 specific penalty charge is required then LV='s Drawdown+ Lite Lifetime Mortgage again should be considered.