The LV= Equity Release Lump Sum Lifetime Mortgage is best suited for those homeowners who are looking for a more significant one-time lump sum payment. This is ideal for homeowners who have a one-time larger expense or a series of larger payments due. With this product, it is not necessary to agree to a larger loan than what is actually needed. This one-time payment can be used to pay off debt, or to accommodate for larger and more unusual expenses.
The LV= Equity Release Lifetime Mortgage allows homeowners to release equity for a certain amount of money in the form of a home equity loan from their property. This money is drawn down from the equity saved up in the home and can be used for any expense. Once the money is received, it can be spent however the homeowner sees fit.
It is important for homeowners to keep in mind how interest will be added to any loan, especially because any interest that accrues will be money that must eventually be paid back to the lender. For this particular product, the interest rate will be fixed and the amount of interest accrued will be added to the amount owed on a monthly basis. From there, the interest will be compounded yearly from the date on which the lifetime mortgage started and it will continue to compound each year until the loan is eventually paid back.
One of the best features of this particular product is that no payments are required over the course of the loan. Instead, the original loan amount along with any accrued interest must be paid when the home is eventually sold. This typically takes place when the homeowner enters into permanent long term care or passes away. In order to qualify for this product, homeowners must be prepared to borrow a minimum amount of £15,000 and be of a minimum age of 60. The property must be situated in England, Scotland & Wales & have a minimum property value of £70,000.
Early repayment charges (ERC’s) for LV= are one of the most favourable in the equity release marketplace. Should repayment occur within the first 5 years then the penalty would be 5% of the amount repaid. The next 5 years would incur a 3% early repayment charge, but the main advantage is that after 10 years NO ERC exists.
One unique option to this product is that it does leave the option open for homeowners to borrow more money in the future, should they need it and should they still qualify for additional lending. However, this further borrowing is not guaranteed and will depend upon the lending criteria of the time at which the borrowing is needed. While borrowing may be available in the future, this product’s rates and features are most appropriate for those homeowners who assume they will only need to borrow one time.