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Letter D

Drawdown facility

This is were a lender agrees an additional amount of borrowing that might not be taken at the outset of the mortgage but held over to be drawn down at a later date.

These types of mortgages are used by borrowers to ensure that availability of future money for say home improvements or simply to give the borrower access to further money without the need for additional underwriting.
A lot of mortgages that are referred to as flexible mortgages have the availability of drawdown funds, these can normally be taken by way of a cheque book facility were you just write a cheque out for the amount you wish to additionally borrow.

This can be very useful instead of personal loans such as car loans for example as mortgage rates are considerably cheaper than personal loans.

It should be noted that a great deal of discipline is needed with this type of borrowing as it is very easy to erode the equity in your property.