LV= began as the Liverpool Independent Legal Victoria Burial Society back in 1843. It has made many strides since with offering financial products for the masses. A variety of financial products including equity releases are attainable through LV=. Approximately 5 million consumers use their products, which also include insurance and income protection. LV= offers at least two equity release options: lump sum and flexible lifetime mortgage.
Types of Plans
The lifetime lump sum mortgage is a standard roll-up equity release. Consumers will repay the equity release loan and any compounding interest at the end of life or move to long term care. The Flexible lifetime mortgage plan is a drawdown equity release. It provides an initial lump sum with a cash reserve facility. Both plans have similar features, with one main benefit difference.
The lump sum is a onetime tax free cash option, while the drawdown mortgage allows subsequent withdrawals. Additionally, with a drawdown plan from LV= the interest rate will accrue only on the money used rather than the funds available in the reserve facility.
Both equity release plans require consumers to borrow at least £10,000. There are no repayments with either plan. Consumers do retain 100% ownership of their home until the home is sold for repayment of the loan and any accrued interest. The amount available to borrow is based on LV= criteria. LV= offers a range of 20% to 50% of the home value depending on age. Plans begin at 60, with a cap at 95. Those who are 95 may receive up to 50% of their home value. LV= requires a minimum property value of £100,000.
In keeping with the Financial Conduct Authority and Equity Release Council, there is a no negative equity clause in both plans. This clause states no assets other than the home can be acquired for repayment of the loan and interest and the beneficiaries will never end up owing more than the value of the property.
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LV= does allow both plans to be transferred to a new home. In the event someone loses a partner or just needs to downsize, they can sell their current home and transfer the existing loan.
Additionally, both plans allow for further funds to be released in the future if criteria apply. The home will need to increase in value to account for the increase in funds. It is also dependent on the current qualification criteria.
LV= offers a flexible repayment plan, which allows a person to make repayments without an early repayment charge. The repayment without early charge is available after 10 years.