Hodge Lifetime has a long history of award winning performance in the retirement industry. The company started out in 1965 offering retirement products including equity release schemes. The company rebuilt itself following the economic downturn over 5 years ago. In building its annuity book & offering competitive annuity rates whenever possible, Hodge was later able to offer a mixture of flexible and cost effective lifetime mortgage products.
Hodge Lifetime’s range of equity release plans have been designed to fit two categories, in particular the innovative Hodge Lifetime Retirement Mortgage, which can act as a retirement mortgage & an interest only lifetime mortgage by design.
Criteria of the Hodge Retirement Mortgage – Interest Only Option
Homeowners aged 55 to 70 can take advantage of the Hodge Interest Only Retirement Mortgage. The youngest homeowner must be 55 years old. The property minimum valuation is £100,000 and the initial release is subject the planholder taking a minimum of £15,000 as a tax-free lump sum. The mortgage is provided to residents in England, Wales, and mainland Scotland.
The standard retirement mortgage from Hodge this requires homeowners to prove stable income in order to make interest only payments. Monthly payments are designed to keep the capital sum at a level balance throughout the life of the loan. Therefore, affordable is necessary under the new MMR rules introduced in April 2014.
The Hodge Retirement Mortgage will need proof of affordability at the current date of application & into retirement itself. Therefore, more stringent measures are taken than on its own Flexible Lifetime Mortgage where 10% voluntary repayments can be made. You equity release adviser would be able to explain the pros and cons of each equity release scheme.
Unique Features of Hodge Retirement Mortgages
There is a secondary feature of this mortgage aswell as the initial interest only option. At age 80, following years of repaying only interest, the individual can elect to roll-over their mortgage interest into a roll-up equity release plan. Interest payments will cease on a monthly basis, with interest accruing instead onto the capital balance once payments are ceased. This option need only be selected should homeowners wish to keep the prior monthly payments to themselves & thereafter permit the balance to increase using the roll-up & compounding of interest.
To start monthly repayment of interest is required, where the capital sum is not due until death or the person moves to long-term care. The home is then sold to repay the rest of the loan with any remaining funds given to beneficiaries. If the loan is rolled into a roll-up mortgage, then payments cease and the capital and incurred interest are paid at death.
Plan holders have a flexible repayment option. If the homeowner would like, they can pay up to 10% of the capital sum back each year within the first 5 years. This means homeowners can pay a little of the capital back without penalty. Should the amount be more than 10%, the homeowner will be charged a fee for early repayment. Starting in year one the fee is 5% of the sum and goes down 1% each year with year 5 penalty at 1%. After six years there is no longer a penalty for repaying more than 10%.
Hodge Equity Release Incentives
Hodge Lifetime incentives include a 5 year fixed rate along with a flexible repayment choice and early repayment charges. Once the 5 year fixed rate has expired the mortgagor will be provided with a further choice of rates – either another fixed rate at the time or leave on the standard variable rate.