Hodge Lifetime is not a direct equity release seller to homeowners with their range of lifetime mortgages. Instead, this company provides products via authorised and approved equity release advisers who offer it to homeowners. Hodge Lifetime has provided their lifetime mortgage products since 1965 often earning an award for their products and services. While they have more than one plan, the flexible repayment option is their most recent product, which fits into more than one equity release category: drawdown, interest lifetime mortgage, and voluntary repayment.
How does the Flexible Repayment plan Meet Interest Only Lifetime Mortgage Demands?
The Hodge Lifetime Flexible Repayment Plan offers homeowners an initial lump sum with the option of withdrawing tax free cash from a reserve facility. The repayment option can turn this lifetime mortgage into an interest-only lifetime mortgage loan. Borrowers are able to pay back 10% of the initial borrowed funds, plus 10% of any subsequent withdrawals without any early repayment fee.
If the homeowner wants to, they can repay any interest that has accrued based on the annual percentage rate for the year, as long as it does not total more than 10% of the borrowed amount. It meets the interest only criteria because interest only lifetime mortgages allow a homeowner to make monthly payments of only interest. As little as £25 can be repaid towards the interest or the full amount accrued each month. With payments being made on this type of loan or repayments, like Hodge Lifetime allows, the homeowner keeps the principle balance from increasing. The interest charged on this loan is fixed for the initial sum, and is fixed at the current market rate when additional withdrawals are made.
Qualifications and Criteria
The minimum age required is 60, with a maximum age set at 85. The property value minimum is £100,000 with a maximum of £1 million. The age of the person and property value is used to determine the loan to value percentage, which is used to calculate the minimum and maximum equity available for release. Hodge Lifetime makes this product available to residents in mainland Scotland, England and Wales.
Equity Release Features and Incentives
Besides the 10% per annum repayment allowable, with no penalty charge, the Hodge Lifetime equity release includes a downsizing protection choice. Homeowners can downsize their current home by selling it and moving to a smaller property and repay the whole Hodge equity release loan, all without incurring an early repayment charge. This option is available 5 years after the loan is taken out by the homeowner. If the downsizing occurred during the first 5 years then the penalty reduces by 1%pa, starting at 5% during the first year of its term.
Other features include a minimum initial lump sum set at £15,000 with subsequent withdrawal features set at £2,000 which is available without any further administration costs.