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Are there specific mortgages for military personnel?
In the past lenders may have made some exceptions to military personnel and emergency services workers – offering discounts for example. It’s not very common now.
There are so many different employment structures in the UK – lenders now find it very difficult to make it specific for each industry. There are certain things within mortgages that might be a little bit different, but overall there’s nothing specific military personnel need to watch out for.
How does the application process work for military mortgages?
There’s no difference in the process. There are some additional things that we might need to consider for military mortgages – for example that forces personnel will buy homes near to where their family is located or where their children go to school. That might not be near their base.
There could be a lot of travelling involved, so we have to build in those costs. Plus, if you’re living on the base Monday to Friday, there’s an accommodation cost as well. The lender will want to ensure the mortgage is affordable even when factoring in these costs.
When is the fee due on a mortgage?
Depending on the deal itself, the fee can be paid on application. It can be added to the loan and then paid off over the entire term. Some lenders will actually offer cash back on completion – so you could pay that fee if you’ve added it to the loan or just gain money back into your bank account. There’s lots of different options out there.
Should you buy a home while on active duty?
There’s an obvious risk here depending on where you are. Being in an active war zone is something that lenders might not like. Mortgage regulations do state that as an advisor we should only be giving advice to people in the UK – we’re not regulated outside of the country.
Technically, if you’re on a forces base overseas some lenders will still allow us to work on your behalf. It definitely has its challenges if you’re on active duty, so it might be better to wait until you’re back in the UK or at least back on leave.
If you’re on active duty it will also be difficult to view properties and make decisions. A lot of estate agents do video tours – but you will need to know what you’re looking for. With mortgage advice it helps me to see and be with that person to get a feel for what they want. If you’re on active duty, it’s difficult to get that.
What mortgage assistance is available to the military?
There’s nothing specific as lenders can’t really be seen to be biased towards particular fields. They have to be able to be open to people in all areas.
What is potentially more helpful is the Forces Help to Buy scheme.
What is the Forces Help to Buy scheme? Are there other schemes for military personnel?
From 1 January 2023, the Forces Help to Buy Scheme will become an enduring policy, ensuring its availability to all service personnel now and in the future. The scheme enables service personnel to borrow up to 50% of their salary up to a maximum of £25000 interest free towards the purchase of a property.
It’s a very cheap way of borrowing the money for a deposit. Most lenders won’t accept a loan as a deposit, but with Forces Help to Buy this is acceptable. It means that First Time Buyers who haven’t had the chance to save money can get a deposit together very quickly at very low cost.
Not every lender accepts this, however. If you go to your bank they might say no. Don’t let that stop you. Keep going – speak to an advisor like us because there’s often a solution.
The other area which again is little known, is help with protection. Some jobs are obviously classed as high risk and mean it will cost more to get life insurance or income protection. Not surprisingly the military is one of these, which makes protection fairly expensive.
There are schemes where you might be able to get some of the monthly costs back from the forces to help pay for it. As brokers and advisors we can help you through the whole process.
How much will I be able to borrow?
As with all clients we need to do full affordability checks. We look at your income, your expenditure now and in the future. If you’re on active duty, payslips for forces personnel have so many different lines – it’s about seeing what will stay on it in the long term to work out affordability.
It’s different for each individual – and the banks vary too. So, if somebody just went online with a bank they will get a completely different answer to what I might get as a broker.
Working out how much you can borrow is usually the first thing I do with all applicants. Often people are very surprised because what I tell them is greatly different to what their bank has said – and more positive.
How can I improve my chances of acceptance?
The main challenge that I see with military personnel is where they live – especially as their address changes quite regularly. It’s important for lenders that you are on the electoral roll, but if you move around a lot you may not register.
Many people keep their driving licence or bank statements going to a family home because it’s easier if you’re living on base. The main thing here is consistency. Make sure the address on your bank statement is the same as the one on your driving licence and electoral register.
People often say to me that they don’t want to vote so they’re not registered. But it’s not necessarily about voting. Being on the electoral roll defines where you live – and lenders do look at those things. They don’t like inconsistencies in documentation. So if we can get that in order it really helps you be accepted.
What happens if I’m deployed during the mortgage process?
Circumstances change for people all the time, and lenders can’t use that against you. People do get deployed, people change jobs, people have families. The main thing here is that if there are changes, come back to us. As your advisor we can help you manage any change in your circumstances.
A classic situation when you are deployed is that you might want to rent your house out. Lenders will usually allow that, it’s just a question of speaking to them and gaining Consent to Let. People do worry about talking to the lender in case they don’t get the answer they wish for. But lenders are there to help you in most situations. We saw that a lot through Covid.
How can a mortgage broker help on Military Mortgages?
We can advise you at every step, and particularly on Forces Help to Buy – your bank might not allow you to pursue this, but we can help you find a suitable and competitive lender. There are huge benefits in talking to a broker.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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