Lifetime Mortgage Option
Here's to a happy and active retirement
With the Lifetime Mortgage Option a legal charge is secured on your home and a cash sum is provided by Hodge Lifetime, which you may spend as you choose. For as long as you live and continue to occupy your home, you don’t have to make any repayments on the loan.
What happens to the interest charged on my lifetime mortgage loan?
Loan interest, at a fixed rate compounded monthly will be ‘rolled up’ and added to the loan.
As a result, there is nothing to pay until your death (the surviving partner’s death in the case of joint plans), unless you decide to sell up permanently. The outstanding lifetime mortgage balance (plus any interest and charges that have accrued) is repaid from the proceeds of the
sale of your property.
A statement of your account showing the interest added to the loan will be issued each year.
How much cash can be released?
The older you are the higher the benefit that can be released in relation to the value of your home. This is because the term of the loan will be based on your life expectancy (the life expectancy of the youngest applicant in the case of a joint application).
To find out if you and your property are eligible here are some examples:
Age of youngest applicant |
Max loan as a % of property value |
Age of youngest applicant |
Max loan as a % of property value |
|---|---|---|---|
| 55 | 15% | 71 | 31% |
| 56 | 16% | 72 | 32% |
| 57 | 17% | 73 | 33% |
| 58 | 18% | 74 | 34% |
| 59 | 19% | 75 | 35% |
| 60 | 20% | 76 | 36% |
| 61 | 21% | 77 | 37% |
| 62 | 22% | 78 | 38% |
| 63 | 23% | 79 | 39% |
| 64 | 24% | 80 | 40% |
| 65 | 25% | 81 | 41% |
| 66 | 26% | 82 | 42% |
| 67 | 27% | 83 | 43% |
| 68 | 28% | 84 | 44% |
| 69 | 29% | 85 | 45% |
| 70 | 30% |
Minimum property value = £100,000. Properties below this value will be considered on referral, subject to a minimum loan of £15,000
Who is eligible for a the Lifetime Mortgage Option?
- The Lifetime Mortgage Option plan can be arranged for either one or more people, who own and live permanently in their own home, which is located in England, Scotland, Wales or Northern Ireland. Plans are available to couples, relatives or friends. N.B. Where there are two or more applicants the property Title must be held in joint names.
- The property must be in sound condition, of standard construction, and worth at least £100,000. If any essential repairs are identified when the property is inspected, release of the cash sum (or an appropriate part of it) may be withheld until they are complete.
- If the property is leasehold, there must be at least 75 years left to run on the lease.
- If there is an outstanding mortgage or charge, it must be low enough to be repaid from the cash sum expected at completion, unless redeemed earlier from your own funds.
Commercial property, freehold flats, sheltered (or wardened) units, prefabricated concrete panel or mobile homes are not acceptable. All other types of property are subject to Hodge Lifetime being satisfied as to the nature of the property and its ownership.
Do I have to pay any fees?
Yes, you will have to pay Hodge Lifetime a valuation fee when you submit your application and an application fee which is deducted from the cash lump sum we pay to you.
For all lifetime mortgages, you will have to pay your own legal fees and may be charged a fee by your Financial Adviser.
Can additional borrowing be arranged?
You may apply for additional borrowing, provided at least three years have passed since the last loan was taken. When considering your application, we will take into account:
- The amount of the existing loan and interest already secured against your home
- The maximum percentage of the property value that you can release depending on your age at the time
- Whether you have sufficient equity left in the property
- The lending criteria at the time of application
A surveyor will re-value the property at your expense, and you will have to pay an application fee. Interest on any additional borrowing will be charged at the interest rate applicable at the time.
Loan Repayment
Can the lifetime mortgage loan be repaid at any time?
If you wish, the lifetime mortgage loan and interest may be repaid at any time.
In certain circumstances an early repayment charge will be applied (please refer
to summary of current charges).
This charge will be waived if you repay the lifetime mortgage loan after moving
into long-term care on medical or other specialist advice.
What about moving house?
You will be free to transfer your lifetime mortgage to a new home of your choice, so long as it provides adequate security for the Equity Release Plan. If the loan and the interest you owe is more than the amount you are eligible to borrow on the value of the new home, you may need to repay part of your existing loan from the sale proceeds. No early repayment charge is made in this event. If you move to a higher value home, no repayment will be necessary. You will be responsible for any costs related to the transfer, including our Solicitors’ fees for work which they will need to carry out (even if the move falls through).
What would happen to the Lifetime Mortgage Option if I married (or re-married) in the future?
If a single planholder marries, it may be possible to revise the terms of the lifetime mortgage to give the new partner a right of occupation. The new occupant will need to meet the age requirement for the plan and, if younger than the planholder, a part-repayment will be due. This will be calculated by taking into account the amount of the loan and interest outstanding. If a right of occupation is not arranged, the new partner will have to sign an agreement to vacate should the planholder die or move out permanently.
What happens when the property is vacated, or I die?
You, or your personal representatives, should arrange for the sale of the property as soon as it is clear that your occupation has ceased. Interest will continue to be added to the lifetime mortgage loan until it is repaid. To avoid the risks associated with vacant property, and the accumulation of interest, the earlier it is sold, the better.
The lifetime mortgage loan, interest outstanding, plus any fees and expenses related to the sale will be due to Hodge Lifetime from the sale proceeds. The balance of the sale proceeds will remain with you or form part of your estate.
Should your absence be due to an extended holiday, or a term of hospital care, for example, Hodge Lifetime would only require your confirmation that the property would be adequately secured during this period.
The lifetime mortgage loan and interest will become repayable if you leave the property for longer than six months without our written agreement.
What if the value of my property doesn't cover what I owe at the end of the plan?
Hodge Lifetime gives a watertight guarantee that if the proceeds from the sale of your property are insufficient to pay off your liability, no further sum will be payable by you. This will ensure that no outstanding mortgage debt is left to you, or to your estate.
This 'no negative' equity guarantee is provided free of charge.
Alternatively, if on the sale of your property the net proceeds are more than the outstanding balance on the loan and accrued interest on it, your estate will retain the surplus.
View our Summary of Current Charges
IS OUR FOCUS
"I am very satisfied with the level of service provided and am grateful to everyone concerned in the process."
"Very happy with your service, thank you."
"We really don't feel it could improve, excellent service and communication."
"Excellent service."
"Have no complaints, so no improvement needed."
"Level of service to us was excellent & very fast from beginning to end so in our case no improvements would be necessary. Very impressed by your company."
"We thought it was first class."
"You cannot improve what is already perfect. Right from day one of making enquiries, the telephone calls explicit, friendly so much that it made you feel you were speaking to an old friend, nothing was too much trouble. Everything was dealt with efficiently."
Find an Independent
Financial Adviser
www.unbiased.co.uk