At RM Mortgage Solutions we can refer you to an equity release specialist who will be able to provide advice and discuss your lifetime mortgage options in Birmingham.
Equity Release Drawdown Lifetime mortgages have been designed to accommodate those who don’t need to release a large cash lump sum at the outset. Instead, you are able to release smaller amounts as and when you need the cash, making it a more flexible option that you can make work for you.
Figures released through a recent Market Monitor Report showed that more than £450 million of housing wealth was released in the third quarter of 2022 through equity release with drawdown lifetime mortgages accounting for 56.7% of all equity release sales.*
So why is equity release drawdown so popular? At RM Mortgage Solutions, we believe that this is down to the added flexibility of the plan. Customers who opt for a drawdown lifetime mortgage are able to take full control of how and when they release the cash from their home, with the added appeal of the interest only accruing on the cash released.*Key Retirement Solutions Market Monitor Report November 2022.
Advantages of an Equity Release Drawdown Lifetime Mortgage
- A pot of money is set aside for you to draw from as and when you need it.
- You only pay interest on the money that you release, which could potentially save you a great deal of money and allow more to be left as part of your estate.
- You can spend the cash you release as you wish.
- It is typically not necessary to make monthly payments.
- The ownership of your home is retained by you.
- Any increase in the value of your property will benefit your estate.
- Repayment of the mortgage may be possible at any time.
- Mortgages from lenders who are members of the Equity Release Council come with a “no-negative equity” guarantee to ensure the amount you owe will never exceed the value of your home. This means that there will never be any debt left for your loved ones to pay when you pass away.
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Disadvantages of an Equity Release Drawdown Lifetime Mortgage
- If you wish to increase the amount of cash beyond the original total amount agreed, you will have to apply for a further advance, which isn’t always guaranteed.
- There are restrictions on the minimum amount that must be taken.
- The inheritance left to family members will be lower. There are, however, some plans that allow you to protect part of your home thereby keeping some inheritance to pass on.
- If your mortgage is repaid early you may incur an early repayment charge.
- Your entitlement to state benefits may be affected. Your equity release advisor will be able to review your situation in more detail and advise you whether or not you will be impacted.
- It may impact upon local authority grants / other grants e.g. for essential home improvements.
If you live in or around the Birmingham area your equity release specialist will be able to advise you of the various equity release schemes and which will be best for you. Alternatively, if it is not suitable for your circumstances then they will advise you of this.
Why not make an equity release appointment today.
Before you consider an equity release scheme, please read Is equity release right for you? carefully.