![]() First Choice Finance Equity Release Solutions will advise you on all of these details during the course of our discussions. However there may be early repayment charges or penalties if you pay off the Lifetime Mortgage early. ![]() Everything - including the interest - is then paid off when the last survivor dies or moves into a care home, or simply sells the property. This is called compound interest or rolled up interest. The interest is added to the amount you initially borrowed and this continues to grow during the period of the loan. Your partner and yourself simply continue to live in your home and do not have to pay the interest on the loan during your lifetime. The loan is secured against the value of your property and then paid off when your home is sold - when you move, die, or go into long term care. Probably the best way to try and understand this is to think of it as a long term loan. ![]() In the case of a drawdown mortgage there can be advantages in minimising the amount of future interest which you ultimately owe.Īny outstanding mortgage, or secured debts, have to be settled first, but then you can spend the money released however you want to. However there are now plans available that allow you to take money out as you need it for regular income, or smaller amounts initially and then capital amounts when needed in the future, in the form of a drawdown lifetime mortgage. More commonly this is in the form of one lump sum. The money is borrowed in the form of a lifetime mortgage. It is possible to borrow a set amount of money against the value of your home. Learn How To Release Equity Using The Draw Down In Stages Method
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