Hodge provided equity release products to retirees starting over 10 years ago. While their product has been removed from the market in terms of home reversion there are still individuals who have these plans including the Hodge Flexible Lifetime Mortgage. As consumers continue to see their equity release plan increase due to interest they may wish to pay off a portion of the interest or some of the interest and capital. Hodge allows for this repayment option without charging an early repayment charge. You may have such a charge through other firms. If you do have a Hodge product and want to understand your repayment options you can use a Hodge equity release calculator to view the results of making different payments.
Hodge Flexible Lifetime Mortgage Plan
Under this plan a consumer is allowed to pay up to 10% per annum in repayments. This means you can pay back 10% of the loan and interest that has accrued without penalty. The 10% is based on the original capital sum borrowed. If a consumer borrowed £50k this person could repay up to £5kpa voluntarily. Depending on the amount of interest that has accrued some of the payment could be spend on the capital sum too.
How the Hodge Calculator Helps
It seems fairly straightforward when you look at the numbers like the above example in terms of how the Hodge equity release calculator can help. As you are able to pay up to 10% based on your capital sum, you can enter in the capital sum you paid and the 10% value. If you find this is too much to repay all at once or throughout the year, you can then use the lifetime mortgage calculator to determine an affordable repayment for this particular year. The calculator will show you your future balance, meaning the remaining capital sum to be repaid based on the amount you repay annually. This helps you come to a decision on what will work best for you.
You also get to compare side by side the no repayment situation in which the balance escalates versus making repayments.
Why Make Repayments
The beauty of equity release particularly in a lifetime mortgage is not being beholden to repayments like a standard mortgage. It works out great for someone who needs funds to supplement their life expenditures without having to sell the property or find alternative money sources. For some they have the ability to repay the loan overtime and like to have this option.
You are here because you are considering how helpful it would be to make repayments on the loan, while also getting equity out of your home.
There is a big reason as to why you might want to make repayments. Obviously your main concern is gaining funds you need, but what about your beneficiaries? If you sell your home now they will not be able to inherit the home. With most lifetime mortgages the home has to be sold in the end because it is the only way to repay the loan and the interest that accrues. Others have life insurance to cover the mortgage, and thus are able to save the home from being sold.
If your situation requires the home to be sold at your death, what is going to be left for the beneficiaries you leave behind? Do you have enough equity in the home that will allow for a cash sum to go to your family? This is why repayment might be helpful and thus a reason to consider the Hodge product.
Using up Inheritance
The capital sum may not use up the inheritance, but over time compounding interest can. The equity release calculator from Hodge can examine the potential equity left in the home when you make no repayment versus the amount left with repayments.
This gives you a better understanding of the potential inheritance you leave behind versus leaving nothing. Each consumer is different and you may find you are unable to make repayments. If this is the case you spent a few hours with a Hodge equity release calculator and other lifetime mortgage calculators to arrive at this decision. You saved time dealing with an equity release adviser who might need several days to consider your situation and arrive at results. At least you are aware of the situation and the potential options before you make a decision on taking with someone by using the calculator.