How Can You Tell If Hodge Equity Release Is The Right Choice For You?

Hodge Lifetime, the UK’s longest-established equity release provider, created the first equity release plan in 1965.

Expert Jason Stubbs from EveryInvestor walks us through Hodge equity release and answers the question: is equity release the right choice for you?

What’s Equity Release?

Equity release is a catch-all word for a later-life mortgage that allows you to access the equity in your house while still living in it.

While plans include an optional loan or interest repayments, both are only payable when you die or transfer into a long-term care facility. Typically, the sum is reimbursed by the sale of the residence.

How Does Equity Release Work?

As you get older, you may discover that you need to supplement your income. 

One option is to withdraw some money from the value of your property while continuing to live there. This is referred to as an equity release. 

Types of Equity Releases

You have two equity release alternatives at your disposal.

A lifetime mortgage is a mortgage that is secured on your home (assuming it is your primary residence) while you retain ownership.

House reversion is selling a portion or all of your home to a home reversion provider in exchange for a lump sum or recurring payments. You have the right to live in the property until you die, but you must agree to keep it up and insure it.

Ready to See if Equity Release Is Right for You?

Consider these factors when deciding: 

  • The most common type of equity release is a lifetime mortgage, which allows you to keep your house while making no monthly payments. This is because it is a debt secured against your home that must be returned when your plan expires. 
  • All of Hodge’s equity release programmes fulfill the Equity Release Council criteria and come with a no-negative-equity guarantee. This means you’ll never owe more than the value of your house.
  • Our knowledgeable equity release advisors will also explain how a lifetime mortgage’s roll-up or compound interest works. Most Key Equity Release clients obtained a fixed yearly interest rate of 3.55% or less. The overall cost for comparison is 3.73% APR.*
  • All of the money you get through equity release is tax-free, and you may spend it as you choose.

How Could Hodge Equity Release Help Change Your Life?

After years of hard work to make monthly payments, your home may be your most valuable possession, especially with the rise in average UK house values over the previous 20 years. 

Downsizing is one way to save money, but it comes with the emotional cost of leaving your family home and neighbourhood.

Meanwhile, people live longer lives, and many struggle to make ends meet on their retirement income. Many alone have any money left over for life’s little joys when the bills are paid.

An equity release plan allows homeowners over the age of 55 to access part of the tax-free wealth that is locked up in the value of their house. 

If you’re thinking of releasing money from your house, you presumably already have a plan for how you’d like to spend it. It might be for a once-in-a-lifetime trip or house upgrades, to pay off debts or help loved ones – and this will impact the sort of plan that is best for you.

In Conclusion:

Equity release can make your retirement more comfortable and maybe a suitable alternative. However, it is always good to consult with your financial advisor to fully grasp your situation.

The only way to know if it’s suitable for you is to consult with an equity release consultant. The FCA has made it a regulatory necessity. Our fully certified equity release advisers provide expert assistance. And if equity release isn’t a good fit for you, they’ll let you know.