Julian Hodge Bank Limited, now Hodge Lifetime has provided UK residents with equity release products since 1965. They were the innovators behind the concept of equity release including home reversion and lifetime mortgages. Since the beginning till current times the company has endeavoured to create products that fit current homeowner needs. Hodge Lifetime has authorised sellers of their products, but does not sell directly to homeowners anymore. Their products fit with Financial Conduct Authority regulations such as Safe Home Income Plan (SHIP) requirements as well as the Equity Release Council Code of Conduct standards.
Flexible Repayment Option
To meet industry demands Hodge Lifetime has created a voluntary repayment lifetime mortgage. It is not specifically designed as a roll-up, interest only or drawdown lifetime mortgage. Instead, clients can create the loan that best fits them and volunteer to make repayments of up to 10% per annum.
The loan has downsizing protection in place due to the voluntary repayment scheme. Homeowners can transfer the loan to a smaller property while maintaining repayments. The new property plus repayments must fit in the criteria so there is no negative equity situation created.
As part of the industry regulated by a no negative equity guarantee homeowners cannot be in a situation where the loan plus interest becomes more than the property value at least by choice. If depreciation of the current home occurs it is a different matter. The clause protects beneficiaries from losing other assets besides the home in a sale to cover the mortgage.
Qualifications and Other Criteria
Voluntary repayment options start at the age of 60. A minimum property value of £100,000 is required. There is also a minimum lump sum required which is set at £15,000. If electing to take on a drawdown mortgage, a cash reserve facility can be set up. The homeowner would need to withdraw a minimum of £1,000 when further funds are required.
Since this is a voluntary repayment plan, Hodge does not charge an early repayment fee even in the first year unless the 10% per annum is not adhered to. If a homeowner pays more than 10% per year as a repayment, then there will be a charge. The charge is based on the amount repaid. It is also possible to just make interest repayments rather than capital and interest repayments.
Hodge Lifetime provides a 10% repayment per year option without penalty as well as downsizing protection.