Drawdown Lifetime Mortgage
EQUITY RELEASE WILL REDUCE THE VALUE OF YOUR ESTATE AND CAN AFFECT YOUR ELIGIBILITY FOR MEANS TESTED BENEFITS.
How does it work?
Similar advantages and disadvantages as a regular lifetime mortgage, with additional issues that are unique to this kind of equity release scheme. The main difference is that you don't request the full sum of money available to you immediately. Instead, you decide on a maximum amount of equity you want to release, and 'drawdown' the cash in stages as and when required.
ADVANTAGES
- You are in control of your money as you can release cash when it suits you , or you may be able to request a monthly income with no monthly payments to make
- You retain full ownership of your home
- You only pay interest on the amount of equity released from your home, so interest could accumulate more slowly than with a regular lifetime mortgage
- Drawdown Lifetime Mortgage plans may be available to younger people (aged 55+)
- Some Drawdown Lifetime Mortgage plans let you guarantee an inheritance for your family
DISADVANTAGES
- Interest rates are usually higher than on a standard lifetime mortgage
- Reduced amount available to leave as an inheritance
- Interest grows quickly as it is compounded
- If you want to increase the amount of equity released beyond the original amount agreed, you would normally have to apply for a further advance, which is not guaranteed
- If you repay the lifetime mortgage loan early, you may have to pay an early repayment charge
- Your tax position and certain state benefits may be affected
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Ashley Phillips Ltd
Suite 1C
Armstrong House
Flemingate
Beverley
East Yorkshire
HU17 0NW
T: 01482 427246
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Ashley Phillips Ltd is registered in England and Wales, No: 06069565. Registered Address: Daybreak, Arnold Lane West, Arnold, Hull, East Yorkshire, HU11 5HP
Ashley Phillips Ltd is an appointed representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited, which are authorised and regulated by the Financial Conduct Authority. Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited are entered on the FCA register (http://www.fca.org.uk/register) under reference 440703 and 440718.
The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.
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