By admin 2020-10-15 11:21:55

Drawdown Loans For Home Improvements


A drawdown loan is commonly known as a “drawdown facility”. It's a loan that gives the options to further advance or get an additional credit on an existing mortgage with lesser admin requirements. With a drawdown loan, you can borrow an additional amount of money which will be required to be paid back in full.

Taking a loan that will not be able to cover all your expenses but still have to pay additional installments with interest afterward may not be advantageous. However, a drawdown is a flexible mortgage option that permits you to take out funds from your current mortgage account, prerequisites include you having not taken money from your mortgage prior. To apply for this loan, it will not be necessary to go through the admin of completing too much paperwork with your mortgage lender.

If you are considering a home improvement or extension, applying for a drawdown may be a solution for you. Apply today and get your application processed by our experts. Get credit in the shortest turnaround time, sleep better at night, and be reassured that your application is handled by experts.

Let us consider some disadvantages of taking out a Drawdown Loan, like any other loan there are risks associated with it. Firstly, be aware that money that is lent to you is secured against your home.


Requirements for a Drawdown Lifetime Mortgage

A drawdown equity release plan that allows you to be able to easily have access to your funds at your convenience during the home improvement or home renovation stages. Monitor and track your mortgage account withdrawals from your property during the lifetime of your equity release loan.


These are some of the requirement:
  • Be at the age of 55 and above
  • Be a homeowner
  • Be a homeowner

Because your drawdown lifetime mortgage enables you to freely have access to release money at your convenience, these are quick procedures of how it all works:

  • Based on your age, state of health, and property value, your provider will be one to agree on a total amount of money that you can borrow.
  • Once you have decided on the lump sum that will be withdrawn, the rest of the money will be kept on a separate account.
  • You can begin to make minimal withdrawals whenever you need and there will be no occurring fees on your withdrawals.
  • However, interest will be added to your new drawdown loan rather than the whole mortgage amount you’ve borrowed.
  • There are no monthly payments required for the loan. Payment of the full loan and interest can be made once your home is sold or when circumstances such as death or permanent care arise.

Disadvantages and Advantages of a drawdown lifetime mortgage:


ADVANTAGES


  • You can still move houses
  • None or small monthly repayments
  • Flexible access to your money that is tax-free
  • No negative equity guarantee
  • Manage means-tested benefits
  • A slow increase in your interest
  • No monthly repayments

DISADVANTAGES


  • An increase on interest-rates
  • Inheritance may be affected with equity release by reducing it
  • Hefty repayment charges
  • Further amounts aren't guaranteed
  • Limits to the amount of money you can withdraw in one year
  • means-tested benefits may be affected

However, lenders may constantly check if you will be able to pay back your loan once approved.If you are considering taking a loan against your mortgage, get in touch with an expert who will provide you with detailed and professional advice. Find out whether you are eligible for the drawdown loan or not, and if so, which plan is best for you?

Get a quote today. Smartmortgages UK

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