Military Mortgage

Are there specific mortgages for military personnel?

Actually, no – there are no mortgage products specifically for the military. However, lenders are increasingly welcoming to people in the Armed Forces. They recognise the challenges of the military lifestyle, such as postings at short notice, living abroad etc.

So even though there are specific products, there are lenders out there that very much cater for people with military backgrounds.

How does the application process work for military mortgages?

The only major difference is whether the client is looking to use the Forces Help to Buy scheme, which I will come onto later. Otherwise, it is exactly the same process as for anyone else.

The lender will look at your income and expenditure just as with any customer. We may have to be a little bit more clever in choosing a lender depending on your address history. If you’ve been in barracks or have moved frequently in the last three years, that can affect your credit score. Some lenders are a bit more understanding than others, so it’s just knowing which ones to go to.

When is the fee due?

If you have any upfront fees on your mortgage such as a valuation fee, that’s paid when you apply for the mortgage. If there’s an arrangement fee you can either pay at application stage or you can add it to the loan. That way, it will incur interest over the length of the mortgage.

The solicitors fees will be due as you go through with them. But generally there are fairly small fees on most lenders’ products.

Should you buy a home while on active duty?

It comes down to the individual, really. Yes, you have the benefits of military accommodation, but it’s just whether or not that is suitable for you, your family, your lifestyle and your set of circumstances.

The military has its benefits when it comes to buying properties and you may get some extras from lenders. But ultimately, whether or not you want to buy your own home is a personal preference.

What mortgage assistance is available for military personnel?

A great start is to speak to a mortgage broker, as we’ll explain that actually there isn’t as much to worry about as you might think. We meet a lot of military people who are concerned about their changing addresses and the effect on their credit score. But we can reassure you that it’s not so different from the civilian world. Sometimes people can live in three or four different rental properties within a few years.

Another helpful area is the Forces Help to Buy scheme. We can explain how that works for you. But really the mortgage assistance and service you’ll get would be exactly the same as for any other customer that comes through the door.

What is the Forces Help to Buy Scheme? Are there other schemes or help available?

The Forces Help to Buy Scheme was reviewed last year and personally I think it’s fantastic news that the government decided to make this a permanent part of the military package.

The scheme lets you borrow up to 50% of your salary, up to a maximum of £25,000, to help with your deposit and solicitor costs. It’s a massive incentive. It is a loan so you will be paying it back from your salary on a monthly basis, generally over 10 years depending on how long you’ve got left to serve.

It’s a fantastic scheme and we were really happy to hear that it was going to continue. Anybody in the military is eligible for it, subject to certain criteria. You have to have completed a certain length of service, generally two years, and you have to have six months service remaining at the point of application. I think there’s a medical exam as well.

So if you’re new to the forces or if you’re just about to end, then it’s not for you. But those in the middle are all generally eligible subject to the criteria.

How much will I be able to borrow?

Again, it’s down to your individual circumstances. That includes your income and expenditure against what the lenders can and can’t do. People talk about income multipliers and the one that gets thrown around is four and a half times. But that’s just a guideline. Some lenders will let you borrow less than 4.5 times your income, and some will offer more.

It’s all down to your circumstances: income, expenditure, credit score, the deposit you’re looking to put down and where you want to buy. We can’t say for certain until the customer comes to us and we look at their specific situation.