The 2nd home/Holiday Home Lifetime Mortgage offered by LV= is one of the best equity release schemes available for those homeowners who are looking to release equity from a home that is not their primary residence. There are few lifetime mortgages currently on the market that are adapted for this specific use, but LV= offers this particular product in both a drawdown option and a lump sum option.
With both the lump sum and drawdown options require no monthly payments to be made. The drawdown option works much the same way as a typical drawdown lifetime mortgage. Homeowners are able to receive an up-front one time lump sum payment. Under this plan, future withdrawals may be able to be made from a cash reserve facility. So, with this particular option, homeowners are able to enjoy the flexibility of only receiving the immediate cash they need up-front but are also able to simultaneously secure that they may be able to access more funds in the future if needed. The funds that are not released in the first lump sum payment are immediately saved in a facility for future withdrawal.
This product can also come in the form of a lump sum option. When using this feature homeowners secure a one-time lump sum payment. There are no future withdrawals in the plan, unless additional borrowing is requested in the future. This would be based on personal criteria at the time involving age, property value at that time & the balance of the equity release plan. With the LV= 2nd Home/ Holiday Home Lifetime Mortgage, the interest rate is fixed on both options for the lifetime of the loan. However, the interest rate is typically lower for those homeowners who choose the lump sum option as opposed to the drawdown plan.
Both options of this plan are available to homeowners who are at least 60 years old. The homeowner’s property must also have a minimum valuation of £70,000. In order to withdraw equity using this plan, homeowners must be prepared to release a minimum of £15,000 in the initial withdrawal.
Not only is this particular product a valuable option for those homeowners who own two properties but the early repayment charges are also quite beneficial and clear. The early repayment charges are fixed at 5% for the entirety of the first five years of the loan term and then move to 3% for the next five years. After that first 10 years, there are absolutely no early repayment charges. This means that homeowners are able to release their equity when needed, via two different options, but then also have the option to pay off the loan without any repayment charges after the first 10 years.
Liverpool Victoria also allow partial repayments during this period, but as stated above these would be subject to early repayment charges.