Drawdown Lifetime Mortgage

Drawdown Lifetime Mortgage

Drawdown Lifetime Mortgage

Drawdown lifetime mortgage products are a specific form of equity release, which is closely related to a lifetime mortgage equity release plan. Drawdown lifetime mortgage products enable individuals to free extra finances through the value of their house. Drawdown lifetime mortgage arrangements are available for mature individuals; yet mortgagers must exceed the age of 55 to qualify for a drawdown lifetime mortgage. Our team of specialist financial advisers are trained to deal with all forms of equity release, including drawdown lifetime mortgage plans. It is their job to find a suitable and competitive drawdown lifetime mortgage plan, for clients who are seeking to free up further finance.

A drawdown lifetime mortgage is one of many schemes associated with lifetime mortgages. Lifetime mortgage arrangements also comprise of interest only schemes, interest rollover schemes and home income plans. Drawdown lifetime mortgage arrangements resemble interest rollover schemes, as both forms of lifetime mortgage require the borrower to repay accruing interest rates along with the entire mortgage debt back to the provider at the end of the contract. The contract is terminated as soon as the borrower dies, or in the event that the borrower is transferred to a care home for an indefinite period. Interest is determined every month and then affixed to the concluding mortgage debt.

The difference between an interest rollover scheme and a drawdown mortgage plan is that the latter enables individuals to withdraw cash throughout the term of the contract, instead of only receiving an initial lump sum of money. An agreement is made between the borrower and the provider on the limit the borrower is entitled to.

The borrower is authorised to set up a cash reserve fund, enabling them to either withdraw the cash as they feel, or arrange an income scheme that provides the borrower with a consistent flow of finance. Drawdown equity release plans are accompanied by many advantages, such as the individual being in control of their newly-generated finances, withdrawing money whenever they require it. It is also possible for the borrower to set up an income scheme, enabling a consistent flow of income. It is our responsibility to search through the available drawdown lifetime mortgage deals, finding the product which most benefits the plans of the borrower, as well as the inheritors of the borrower who hope to obtain the estate after the borrower’s death.

Individuals usually choose to arrange a drawdown lifetime mortgage, due to a number of benefits that are associated with the plan. Firstly, the individual has sole control over the way they receive finances, as the plan enables borrower’s to withdraw cash at any time if  required. No other equity release scheme gives borrower’s the freedom to withdraw smaller lumps of cash, as well as being able to set up a program enabling the borrower to receive income.

A drawdown lifetime mortgage may also have  numerous drawbacks, for instance, drawdown lifetime mortgage plans typically present higher interest rates in comparison to alternative lifetime mortgage schemes. Furthermore, equity remaining in the estate rapidly dissolves due to compounding interest rates added to the total mortgage repayment.

A drawdown lifetime mortgage is often perceived as an effective method to free up extra finances, as the borrower has the freedom to withdraw and manage their newly-generated cash as they desire. Furthermore, the borrower does not need to issue any payments to the provider for the remainder of their lives. However compounding interest will have a drastic effect on the property’s value, so potential clients are advised to discuss the arrangement with family members. Our team of financial advisers are available if clients need support when deciding on a drawdown lifetime mortgage arrangement.

Seeking a drawdown lifetime mortgage? Speak to one of our expert advisers today.

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.

How to get in touch

Feefo logo

This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.

CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR YOU WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN ANY DOUBT, SEEK INDEPENDENT ADVICE.