Drawdown

Drawdown facilities have become very popular throughout the equity release market and are similar to the traditional Lump Sum plans offered, with some key differences. An initial lump sum is provided by the lender and interest compounds on the lump sum amount, as well as on top of any interest charged. However, an agreed amount of money is set aside to be accessed from the drawdown facility in the future - think of it as a pot of money that you can access as and when required. Interest is only charged on the further borrowing from the drawdown facility once it is accessed and is charged at the lenders prevailing rate at the time, therefore could be higher or lower than the interest charged on the initial release. Having a drawdown facility available to you rather than accessing a larger lump initial lump sum, can help mitigate any negative effects to your state benefits as well as help reduce the erosion of equity against your estate.

There are different variations of products that offer a drawdown facility, however they all offer you the benefit of reducing the roll-up effect of interest by only accessing the cash that you require, rather than being charged interest on the total facility available to you. Drawdown facilities are attractive to those who are cautious and want to leave the maximum amount possible to their beneficiaries after they pass away. Drawdown facilities are also beneficial to those who want to increase their annual income but do not want to purchase an annuity policy.

"Enjoy your retirement with friends"

Key Features

  • Provides a tax-free cash lump sum to use as you wish

  • Flexible access to further funds in the future as and when required

  • Allows you to consolidate and pay off loans and credit cards, allowing more financial freedom

  • Voluntary payments can be made in order to reduce the amount owed

  • Available to those with poor credit histories, with no affordability checks

  • More flexible than Lump Sum plans

  • Interest is only charged on the amount(s) borrowed

All lifetime mortgages are now regulated under the Financial Conduct Authority. Because lifetime mortgages are only available to those in their later years, all lifetime mortgages (and home reversion plans) require the applicants to receive financial advice from an equity release specialist, as well as independent legal advice. Because there are multiple equity release lenders each offering different products with access to various features, JNS Financial highly recommends that you get advice from a financial adviser who can offer recommendations from across the whole of the market, rather than restricted advice linked to only one lender. We will only introduce you to equity release specialists who are independent, therefore act in your best interests. For more information, please contact us today.

JNS Financial Ltd is a limited company registered in Wales at 16 Station Road, Llanrwst, Conwy, LL26 0EP, under company number 11931412. JNS Financial Ltd provides access to a range of retirement services from specialist providers including The Right Equity Release, The Right Will and Safe Hands Funeral Plans. JNS Financial Ltd is not regulated by the Financial Conduct Authority (FCA) and is not authorised to give financial advice. However, we are proud to introduce you to The Right Equity Release Ltd who are regulated by the Financial Conduct Authority, for all of your Equity Release, Mortgage and Protection requirements. The Right Equity Release does not charge any up front fees and a fixed fee is only charged on completion of an Equity Release Plan. Typically, this is 1.5% of the total facility or £1,295 whichever is the greater. All information published on www.jnsfinancial.co.uk is intended for consumers based in the UK as general information only, and does not constitute financial advice. Please contact JNS Financial on 01492 818589 for further information.

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