A leading equity release lender has opened the door for home owners who have had borrowing applications rejected because their properties were considered unsuitable security.

A review of underwriting terms by LV= lets more properties in to the lending net for lifetime mortgages.

The firm explains that homes previously declined are now considered as adequate security for equity release – including sheltered accommodation and unique or unusual properties in an exceptional condition or desirable location.

The updated policy follows feedback from customers and advisers who were confused about the types of properties LV= would consider for equity release.

Vanessa Owen, LV= head of equity release, said: “We’ve really listened to customers and advisers ahead of making these policy changes. These new more flexible terms give us the ability to look at each case individually without potential equity release properties being automatically declined on our system.”
The new underwriting rules apply with immediate effect to LV=”s lifetime mortgage range, including -

  • Flexible lifetime mortgages for a lump sum withdrawal of £10,000 or more followed by further lump sums of £2,000 or more
  • Lump sum lifetime mortgage for a single withdrawal of £10,000 or more

Both mortgages are open to homeowners aged between 60 and 95 years old, and offer a negative equity guarantee.

A recent survey if IFAs by LV= found 98% predict big growth in equity release, while 48% of advisers consider that growing popularity in the product will be due to a shortfall in pension provision.

Owen said: “It is encouraging to see the majority of IFAs believe that equity release has a strong role to play in helping to solve problems such as the funding of long-term care and a lack of pensions provision in retirement.

“For many people their home is their greatest asset so it is understandable that more people will want, or need, to access the equity in their home.”

The change in policy follows on the decision of The Halifax to withdraw a home-linked retirement plan only available through brokers.

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