In this brief blog, we will discuss the Hodge lifetime mortgage.
A lifetime mortgage is a mortgage which is only available for those over 55. With a lifetime mortgage you are able to release some or all of the equity in your property. You can then choose to either make monthly mortgage repayments which contain only interest or roll up the interest to be paid off when you die or move into long term care.
The lifetime mortgage is repaid when you die or move into longterm care by selling your home and whatever is left over is paid to your estate.
Who are Hodge?
Hodge is a financial company which has been providing financial products for those who are retired since. Hodge has been doing this since 1965. Hodge has regularly received an award for their products every year.
“Hodge Lifetime is a trading name of Hodge Life Assurance Company Limited and Julian Hodge Bank Limited. Our annuity products are provided by Hodge Life, and our retirement lending products are provided by Hodge Bank.”
The Hodgelife time mortgage is a mortgage product for over 55s provided by Hodge Bank.
Hodge offers a variety of lifetime mortgages. Some allow you to make monthly mortgage repayments towards the interest being charged on the Hodge lifetime mortgage, almost in the same way as an interest-only mortgage. You can choose to stop making the interest repayments at age 80 and have them rolled up and repaid at the end of the Hodge lifetime mortgage term. This is the interest roll-up option.
Another type of Hodge lifetime mortgage will even allow you to make capital repayment towards the capital borrowed but with an annual maximum of 10% per month. This is the Hodge flexible repayment plan lifetime mortgage.
You can use the funds released from your Hodge lifetime mortgage to do anything.
.If you have bad credit such a CCJ, mortgage default, home repossession and banKruptcies. You should contact your equity release advisor to see if you will be able to get a Hodge lifetime mortgage with bad credit.
The Hodge retirement mortgage
The Hodge retirement mortgage is the brand name for the Hodge lifetime mortgage. It is designed for those who are between 55 and 85 years old.
The Hodge lifetime mortgage can be an interest-only lifetime mortgage with a two or five year fixed rate which then reverts to a standard variable rate. The two or five year fixed rate will have an early repayment charge attached to it. Once you turn 80 you will have the option to convert the Hodge lifetime mortgage to from an interest-only styled mortgage to a Hodge lifetime mortgage where the interest is rolled up and paid back at the end of the mortgage term when you die or move into long term care.
The Hodge lifetime mortgage can be used for whatever you want and the loan to value rates on offer will be based on your age.
The guidance on the loan to value rate is:
52% Loan To Value for ages 50-70, 47% Loan To Value for ages 71-75 and 42% Loan To Value for ages 76+.
The lifetime tenure isn’t guaranteed on the Hodge lifetime mortgage as this is dependant on if you continue to keep up on your monthly mortgage repayment. If you continue to keep up on your monthly mortgage repayments then a no negative equity is guaranteed.
The rates on your Hodge lifetime mortgage term isn’t fixed for the term of your mortgage.
When looking to get a Hodge lifetime mortgage the lender will look at your current age to determine if they can lend to you. This is mainly to see if they will want to lend to you based on how old you are considering you meet the minimum age requirement of 55. Hodge will consider the ages of both borrowers if you are seeking a joint Hodge lifetime mortgage. The minim age for the youngest applicant will be 50 years old when making a joint mortgage application. The maximum age for the Hodge lifetime mortgage is 88 years old for the youngest applicant.
The property will need to be in England, Wales or Scotland to b eligible for a Hodge lifetime mortgage.
The maximum loan to value you may be able to get will be based on your properties value but Hodge will only lend on properties with a maximum value of £1,000,000 outside London and £2,000,000 for inside London and high-value locations. The minimum property value for the Hodge lifetime mortgage is £100,000.
The minimum loan you will be able to get with the Hodge lifetime mortgage will be £20,000 and the maximum loan you will be able to get is £750,000.
The application fee for the Hodge lifetime mortgage is £995.
The loan to value you will be able to get on your Hodge lifetime mortgage will also be based on your own age.
You will need to provide proof of income to be eligible for a Hodge lifetime mortgage. This can be income from employment, from investment or from your pension. Ou must show that you are able to continue making your monthly mortgage repayments on your Hodge lifetime mortgage.
The property you want to get a Hodge lifetime mortgage on must have a standard construction rather than a non-standard construction. Hodge will also insist on a property survey being carried out by a surveyor they appoint.
Hodge Lifetime mortgage offers incentives such as a free valuation, cashback, contribution towards legal fees, free applications, a 5-year fixed-rate with some particular products, early repayment charges will also be placed based on the amount of funds that are repaid during that 5 years fixed rate time.
The early repayment charges for the Hodge lifetime mortgage include:
“2 year fix (of capital repaid):
Year 1: 3%
Year 2: 3%
Year 3 onwards – no early repayment charge is payable5 year fix (of capital repaid):
Year 1: 5%
Year 2: 4%
Year 3: 3%
Year 4: 2%
Year 5: 1%
Year 6 onwards – no early repayment charge is payable”
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.