Hodge Flexible Drawdown Plan is one of the many products Hodge Lifetime has created to keep a competitive edge in the lifetime mortgage and equity release industry. With award winning products and services, plus more than 50 years in service, the company has managed to offer flexible, fixed rate and competitive APRs to their customers.
The Flexible Repayment Plan is a form of drawdown lifetime mortgage which Hodge Lifetime created to fit with the needs of today’s consumers. With a drawdown mortgage consumers are able to take what they need after the initial lump sum whenever they need more funds.
Criteria of the Hodge Flexible Lifetime Mortgage Option
This plan is available for individuals over 60 years of age. If joint applicants are filing, the youngest homeowner must be at least 60. The property should have a minimum of £100,000 in property value. Consumers will need to take a minimum initial withdrawal of £15,000 at the outset. It is for any consumer with a residence in England, mainland Scotland and Wales.
The initial sum is tax free with a cash reserve facility set up for additional funds that are not required at the initial stage of the contract. Withdrawal amounts to use the additional reserve must be taken in increments of at least £1,000. There are no additional administration fees. Interest is fixed for the first withdrawal and interest is compounded only on the funds withdrawn from the reserve.
Unique Features of this Drawdown Mortgage
Hodge provides special features for repayment in which up to 10% of the original loan amount borrowed can be repaid each year without any penalty applicable. The flexible repayment plan can also be used as an interest only mortgage tied to an equity release facility.
There is also a downsizing protection option which uniquely allows the homeowner upon downsizing after 5 years to completely repay the equity release scheme with no penalties applicable. In fact if the repayment on downsizing occurred in the first 5 years, there is still only a pro rata penalty starting at 5% in year 1, down to just 15 in the 5th year.
One repayment is to pay up to 10% of the loan back each year, where interest or interest and capital are repaid. This repayment option can be used on all of the drawdown withdrawals to keep interest low or the capital sum nearly the same. Some consumers have adopted the full 10% repayment rule and as such will actual reduce the value of the loan over time, subject to a minimum ceiling cap balance of £10,000.
Plan holders are able to choose any repayment amount with the 10% limit as there is no monthly contractual payment required. Repayment may only begin 12 months after the initial plan and Hodge Lifetime will permit four payments per annum.
The downsizing protection choice allows for early repayment in which early repayment charges occur only in the first 5 years. After 5 years no penalty is placed on the loan.
Hodge Equity Release Incentives
Hodge Lifetime incentives include a free valuation with flexible repayment option and no repayment penalties after 5 years. Borrowers also have a downsizing protection option.