Hodge Lifetime started under Julian Hodge Bank Limited. This lifetime mortgage and financial institution started offering equity release products in 1965. They are the longest equity release provider throughout the UK. Hodge Lifetime has been innovative as a lender of retirement mortgages, often seeing a need and creating a product to fit consumer demand. Their retirement mortgage is a lifetime mortgage; however, it is outside the Equity Release Council’s Safe Home Income Plan (SHIP) standards. The creation of their retirement mortgage is meant to be a more flexible way to borrow funds during retirement.
Aspects of the Retirement Mortgage
Hodge Lifetime retirement mortgage allows homeowners to borrow funds even after they have retired. It is secured against the current value in the home. Hodge allows the funds to be used for nearly any purpose the homeowner may have. Borrowers are required to repay interest each month. Hodge does base the calculation of loan to value percentage on the property value and income. The capital sum is repaid at the time of death or if the homeowner moves into long term care on a permanent basis.
Hodge Lifetime retirement mortgage does come with the no negative equity guarantee ensuring that a sale that falls short of the capital sum will not hold the homeowner or beneficiaries liable for the shortfall.
This retirement mortgage also comes with an interest roll-up option should homeowner’s income in the future become reduced. At a time when the youngest homeowner reaches 80, the loan can be rolled into a standard lifetime mortgage without interest repayments each month.
Homeowners will need to show proof of income. A home valuation will be necessary to determine the loan to value percentage. The retirement mortgage is available when the youngest homeowner must meet the eligible age criteria.
Interest is required, which can be a disadvantage for homeowners looking to have enough retirement income. However, the option to roll over the loan and roll up the interest after the age of 80 makes up for the slight disadvantage.
The amount of the loan taken out can also reduce the inheritance left for beneficiaries. Yet, the repayment of interest also reduces this disadvantage to ensuring the capital sum remains the same for the life of the loan providing full interest is repaid.
Hodge Lifetime’s retirement mortgage has a five year fixed rate with flexible repayment option. It also allows retirees to repay up to 10% of the capital in the first 5 years of the loan without early repayment charges.