Drawdown Lifetime Mortgages London, Middlesex, UK Surrounding Areas (Equity Release)
If you are looking for a more flexible form of lifetime mortgage, then the best drawdown lifetime mortgage could be your answer.
The main difference between these two schemes is that under a drawdown scheme instead of releasing all of the available money at the outset, a maximum facility is created and you decide how much of this facility you take at the beginning (subject to a minimum of £10K). The remaining amount of money is reserved for you and you can request the same when required.
According to the age and property valuation, you may be able to obtain £65,000. However, currently, you only need £15,000, and the remaining £50,000 can be left available for later and further withdrawals.
Withdrawing money when required, not only allow you to immediately benefit from some money but will also preserve more equity in your home since the amount of interest is only charged on the money taken, not what’s held for possible later use.
You are never compelled to take any more money.
Further requests to drawdown money are easy, incurs no new set up fees, and doesn’t require you to take fresh legal or financial advice and will normally be put into your bank account within 7-10 days.
Further withdrawals (within the limit created) can be taken as often as you like.
Of course, taking smaller amounts only when required may help avoid affecting State Benefits.
Being typically “roll-up of interest” you will have no monthly repayments. As such can be a very useful way of funding either regular holidays, providing additional “income” or even paying for additional care at home.
What is Drawdown Lifetime Mortgages?
A drawdown lifetime mortgage is one of the types of equity release that enables you to draw the cash against your home as and when you want instead of getting a lump sum at once in lifetime mortgage equity release drawdown. It is more flexible than the regular lifetime mortgage equity release since you get an option to release the case based on your needs. When you choose an equity release drawdown facility, you will get some lump of cash initially along with an approved cash limit that you can draw whenever you want. You are required to pay interest only for the amount you have withdrawn. Thus, this type of equity release drawdown is considered a cost-effective option as the interest amount builds up at a relatively slower pace.
How Our Drawdown Lifetime Mortgages Works?
Unlike other types of equity release, the drawdown lifetime mortgage enables you to release the money in small chunks as and when you like. However, you will still have to pass through the same criteria of being at least 55 years old, a UK resident and a qualifying homeowner. Here is a quick glimpse of how it works:
- We evaluate your age and value of your property and agree to pay an overall amount of money against your property.
- You take an initial sum of money, and the rest is secured in a cash reserve facility and ready for you to withdraw any time.
- You can release money in smaller sums as and when you require them.
- The interest amount is added to the money you withdraw every time. However, there is no new set up fees.
- You don’t need to make any monthly repayments. The full loan amount and the interest need to be repaid when your property is sold after you die or shift to long-term care.
Advantages of Drawdown Lifetime Mortgages
Retain your homeownership – The best drawdown lifetime mortgage allows you to retain homeownership, so you can benefit from the rise in the property value in the future.
Interest grows slowly – Rather than paying the interest on the total amount released at once, you need to pay interest only for the money you release at different time intervals.
Easy access to tax-free money – You can withdraw cash as and when you like, and spend it the way you want.
No monthly repayment – The loan amount and interest are required to repay when your home is sold, which is after your death or you move into permanent care.
No negative equity guarantee – You will never have to pay a sum more than the value of your home.
Organise means-tested benefits – Affecting state benefits can be prevented when you withdraw smaller amounts.
The Cost of Drawdown Lifetime Mortgages
Usually, the drawdown lifetime mortgage interest rates are fixed for every amount you release. The interest is accumulated, and need to be repaid only after you pass away or go for long-term care. However, we advise you to use the best drawdown lifetime mortgage calculator to get an idea of how much equity you can release against your property. We may charge a small solicitor or administrative fees to process your application.
To know our best drawdown lifetime mortgage equity release interest rates, we suggest that you speak to one of our equity release experts so that you can get all the details you want to make an informed decision.
Difference Between Drawdown Lifetime Mortgages and Lifetime Mortgages
A drawdown lifetime mortgage is a type of lifetime mortgage with some differences:
Lesser interest amount – The interest in drawdown lifetime mortgage is charged only on the amount you withdraw. The interest doesn’t accumulate on the funds that are in the reserved facility.
More flexibility – Unlike the lifetime mortgage, you can withdraw money based on your requirement.
Leave more money for your family – Since there will be less interest to pay, there will be more money left for your family.
Lesser impact on means-tested benefits – The finances are under your control, which means you can organise the way you want to reduce the impact on means-tested benefits and payments. The best drawdown lifetime mortgage is a good way to secure your retirement without having to worry much about paying high interest. If you think best drawdown lifetime mortgage could be the right choice for you, get in touch with us right away.
Please contact us today to find out more.