Hodge Lifetime has an incredible reputation when it comes to offering equity release products. In fact, Hodge Lifetime offered the very first equity release plan back in 1965 and continues to grow and improve its reputation and reliability in the equity release marketplace.
The retirement mortgage offered by Hodge Lifetime offers a different spin on the traditional lifetime mortgage scheme. It allows for increased flexibility during retirement by offering borrowing that is secured against the value of a property or home. The loan secured can be used for virtually any purpose.
Hodge Retirement Mortgage applications are available to UK residents between the ages of 55-70 who own their main residence and must have a minimum property value of £100,000. Their property must also be situated in England, Wales or mainland Scotland.
With the Hodge Lifetime Retirement Mortgage, homeowners are expected to pay the interest that accrues on the loan on a monthly basis. The amount of money that can be borrowed depends on the income of the homeowner(s). This is different from many lifetime mortgage schemes which take in to account the age(s) of the homeowner(s). The capital amount of the loan secured through this product is due when the home is sold. This typically takes place when the homeowner has either passed away or has moved into permanent long term care.
There are several unique features to this product:
1. Flexible Repayment Option. With this feature, homeowners are allowed to overpay in the amount up to 10% of the initial loan each year without incurring any penalties or charges for the first five years of the loan. After those five years, no early repayment charges apply and the homeowner is able to make any overpayments they want.
2. Favourable Early Repayment Charges. The Hodge Retirement Mortgage only has early repayment charges applied during the first 5 years with none thereafter. Therefore, unlike traditional equity release schemes there is no danger of having an unlimited term applied to potential penalties. The loan can therefore be repaid in full after 5 years with no ERC.
3. No Negative Equity. This feature means that as long as the homeowner pays their interest payments on time, their estate will not be held in the negative should the sale of their home not cover the amount owed on the loan.
4. Interest Roll-Up. With this option, once the youngest borrower reaches the age of 80 or on the fifth anniversary of the loan, whichever is later, the homeowner does not have to pay the mortgage interest and can instead have the interest rolled up and added to the loan each month.
There are risks to be taken into account with this product. Homeowners must be fully prepared to make the repayments on the mortgage or they could put their home at risk for repossession. This means that homeowners must be cognizant of their income in the future and ensure that if their income decreases, or their expenses increase, they will still be able to afford their monthly interest payments.
Under the new UK Mortgage Market Review (MMR) Hodge Lifetime will stress test your income, not only now but also to prove affordability into retirement. Therefore proof of income & pension forecasts maybe required to show affordability. These measures are put in place for consumer protection & ensure nothing untoward will occur in the future. A sensible stance by Hodge Lifetime.