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A residential interest only mortgage for customers age 55 to 95 from Hodge Lifetime.

18 January 2017

Hodge Lifetime

Hodge Lifetime offer a personal approach by using people to underwrite their cases and not just computers. 

They will update you at every stage of the process. They also provide you with a submission guide, an affordability guide and a list of essential documents for all 55 Plusa pplications. 

Here is a recent case study to help you understand how they can help your customers. 

Hodge Lifetime 55 Plus case study – The Jones’s

Mr & Mrs Jones are aged 75 & 66, both self employed in administrative positions for a London firm that they own and run, they are both still working and intend to retire at aged 80. With an outstanding mortgage of £100,000 the Jones’s wished to borrow £500,000 in order to clear their existing mortgage and also £50k of existing debt, along with gifting the remains to their children for property purchase. Their property is currently valued at £1.1 million, they requested a 5 year term on a 2 year fixed rate of 3.49%. They have chosen downsizing as their preferred repayment strategy, as they wish to remain in their existing property for the next 5 years and will then look for something smaller.

Both applicants earn self employed income of £105,000 (Mr) and £35,000 (Mrs), on retirement both will receive a full state pension and they are also in receipt of combined rental income of £33,000 per annum most of which is currently paid to Mrs Jones. 

The 55 Plus mortgage could be offered for the £500,000 loan amount requested providing them with the flexibility to pay off their mortgage and debts and so be better off month to month financially whilst providing an early inheritance and the piece of mind that their children are able to get onto the property ladder thanks to their help. 

Why does this case work?

Income is acceptable as both Mr & Mrs Jones have good levels of self employed income, with Mrs Jones receiving the majority of the rental income on top of her salary, meaning the case remains affordable for both customers for the 5 year term requested. 

As both Mr & Mrs Jones undertake administrative/office based duties in their roles, we consider it acceptable that they could work until aged 80 and can therefore take 100% of this income into account. 

Downsizing is an acceptable strategy because there is more than £150K equity left in the property after the loan has been taken out. As the property was worth over £1 million it was referred to property underwriters who were able to confirm its acceptability.

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