In 1965, Hodge Lifetime started offering retirement mortgages like the Flexible Repayment Plan. Almost from the beginning and every year since, Hodge has received an award for their financial or retirement products and services. Hodge Lifetime does not sell directly to consumers, but offers their products through several qualified lenders.
How does the Hodge Voluntary Repayment Mortgage Meet Lifetime Mortgage Demands?
Hodge Lifetime offers their flexible repayment plans as a voluntary repayment lifetime mortgage. Homeowners have a choice of making up to 10% repayment per year on their lifetime mortgage. This turns this equity release product into an interest only option. Any time a mortgage has interest payments or repayment options it offers flexibility to clients to keep their principle balance and compounding interest in check.
The flexible repayment mortgage can also be used as a drawdown mortgage. A cash reserve facility is made available to the homeowner, where subsequent withdrawals can be taken when needed. The voluntary repayment plan allows for 10% of the initial sum plus 10% of any further withdrawals to be repaid within a year period.
Qualifications and Criteria
All lifetime mortgages are dependent on age and property value for the calculations. It is possible to find an online calculator to determine eligibility for the lifetime flexible repayment plan. The age criteria are 60 for the youngest homeowner and 85 for the oldest homeowner. The property value range is £100,000 to £1 million. Both age and property value determine the loan to value percentage in which a minimum initial sum is set, with the availability of further cash funds in a reserve facility. Hodge Lifetime provides their voluntary repayment plan to homeowners in England, Wales, and mainland Scotland.
Equity Release Features and Incentives
Hodge Lifetime offers a downsizing protection plan plus 10% per annum repayments without penalty. Downsizing protection allows a homeowner to move to a smaller home and not pay an early repayment fee. However, there is a caveat to this protection option – homeowners must be in their original property for five years before they can downsize to a smaller home without penalty. If they move during the interim period then a reducing penalty can be incurred. This starts at 5% in the first year of the plan term & reduces by 1%pa over the initial 5 year period.
Hodge Lifetime has set the minimum lump sum at £15,000 for individuals who wish to use the voluntary repayment plan as a drawdown mortgage. Any further withdrawals must meet the minimum amount of £2,000.
In keeping with the Equity Release Council Code of Conduct the voluntary repayment plan includes a no negative equity guarantee. The clause protects all other homeowner assets from being seized should the compounding interest and principle balance exceed the home sale value.