Drawdown Schemes

 

Drawdown schemes are a welcome innovation to the equity release market & are also a popular method of releasing equity. Their prominence has also been assisted by the fact that interest rates have now become much more competitive.

 

Drawdown schemes are based on the principle of `roll-up`. However rather than taking funds in a single withdrawal, drawdown enables you to take it in stages.

Advantages

  • Interest is only charged on the cash released.
  • Less interest will potentially be charged over the long term
  • Potentially more inheritance will be available for your beneficiaries
  • Ad-hoc withdrawals can be made, as & when funds are required
  • Can assist in mitigating against loss of mean-tested benefits

Disadvantages

  • There may be a limitation on the size of the initial lump sum
  • Some reserve facilities may not be guaranteed & can be withdrawn by the lender
  • Future withdrawals can be at a higher interest rate than the original lump sum
  • The size of the reserve facility maybe restricted

 

For equity release products, we can be paid by commission, a fee, or a combination of both. Our typical fee is £595.

EQUITY RELEASE MAY INVOLVE A LIFETIME MORTGAGE OR A HOME REVERSION PLAN. TO UNDERSTAND THE FEATURES AND RISKS, PLEASE ASK FOR A PERSONALISED ILLUSTRATION.

A LIFETIME MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. TO UNDERSTAND THE FEATURES AND RISKS, ASK FOR A PERSONALISED ILLUSTRATION.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.

A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

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The guidance provided within this website is subject to the UK regulatory regime and is therefore primarily restricted at consumers based in the UK. 

The Financial Advice Bureau is an appointed representative of TenetConnect Limited, which is authorised and regulated by the Financial Conduct Authority. TenetConnect Limited is entered on the Financial Services Register (www.fca.org.uk/register) under reference 149826.

Registered office: Sovereign house, 12 - 14 Warwick Street, Earlsdon, Coventry, CV5 6ET. Telephone: 02476 712770.

Principal : Mark Garrood

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