“We tailor our advice to you and manage everything with the lender from that initial application all the way through to your mortgage offer. Then we work with your solicitors right through to completion.”
Mike Haupt – Mortgage Adviser
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Michael Haupt shares his expertise on military mortgages.
Are there specific mortgages for military personnel?
With the exception of the Forces Help to Buy scheme, which we’re going to talk about in a little bit, unfortunately, no, there are no specific military mortgages out there from lenders.
But in some ways that’s a really good thing, because it means that you’re not disadvantaged compared to a civilian. You’re picking and choosing from the best deals and lenders are working to offer you the most competitive rates.
So while it’s a little bit disappointing that there are no mortgage ranges for military personnel, you’re not disadvantaged – and that’s the important thing.
How does the application process work for military mortgages?
Again, there are no specific differences, but how we approach things will vary depending upon the person we’re talking to. So, for example, if you’re based abroad at the moment, there might be a few different bits of criteria that apply.
How your pay is set up might also lead to slight differences, but there’s nothing specific in terms of the general lending criteria or application process for a military mortgage. It’s really about making sure that you understand the process and what the lender is looking for. We would naturally choose the right lender for your circumstances.
When is the fee due?
Different fees may be payable at different stages. The big one that people are most worried about is the legal fees and stamp duty. You normally have to pay a small deposit to cover costs that your solicitor incurs during the application process, through to completion. Their final bill will include the stamp duty which is due when you actually move into that property.
Other fees you’d probably want to consider are potentially survey fees. Depending on the property you buy, you may want to appoint a surveyor to look at the house for you. That’s usually payable at the point that you apply for the mortgage to buy that property.
There are also mortgage product fees. You might pay these up front at the beginning of the application process, or you can choose to add them to the mortgage. They would incur interest in that case. You could also choose a mortgage that doesn’t come with a product fee. Again it’s about what’s the right thing for you at that moment in time.
You’d also potentially have a mortgage broker fee. Here at Tomorrow Mortgages we do charge a fee, which is payable when you accept the offer of your mortgage from the lender.
Should you buy a home while on active duty?
This is a very personal choice for the individual. There’s nothing stopping you buying a property while you’re on active duty – lenders don’t specifically say that you can or can’t. It would be very much down to you to decide whether it’s the right time to buy a property.
Ultimately if you’ve found a property that you want, there’s nothing stopping you. We would generally talk through how you plan to manage things. You might need some family and friends to support you in terms of viewings and progressing the application. But yes, you can absolutely go ahead and buy if you are on active duty.
What mortgage assistance is available for military personnel?
This is where we come in. From a lending perspective, mortgage providers are definitely getting a lot better at understanding military life and the circumstances that you find yourself in. They will look at ways to support you and adapt their mortgages as best they can.
Potentially, for example, if you are living in military barracks or tied accommodation, they might allow you to rent your house out during that time. That’s fantastic because they often wouldn’t let a civilian do that.
Where we come in is to help you understand the options you’ve got. How will the different lenders out there support you? Which is the right lender, with the best understanding of military life, that’s going to help you the most?
We also understand that your military payslips are complicated and might have multiple different allowances for different roles you’re doing. Potentially there will be future changes coming too. We use our experience here at Tomorrow Mortgages to really understand your circumstances and identify the right mortgage for you. We’re here to help you at every stage towards buying the house you want.
What is the Forces Help to Buy scheme? Are there any other schemes to help military personnel?
We’re recording in January 2023 and the great news is that the Forces Help to Buy scheme has been made a permanent part of the military package. It started as a temporary trial, then in December 2022 the government announced that it’s becoming a definite option for military personnel, which is fantastic.
Forces Help to Buy enables you to borrow up to 50% of your salary, up to a maximum of £25,000, to use as a deposit for your first home. You can pay that back over 10 years on an interest-free basis. It’s a brilliant way to help military personnel buy property.
It’s available to first time buyers and home movers – so, broadly everybody. There are a few specific criteria that we would go through with the individual themselves. But it’s great to be able to borrow up to £25,000 and put that towards your deposit.
Does It Cost For An Initial Chat?
Please don’t be afraid to pick up the telephone. Contact us with any questions or any conversations you want to have. There’s no commitment, there’s no silly questions. I’m here to try and help put your mind at ease, so let’s have a conversation and answer your questions.
How much can I borrow as a member of the armed forces?
If you’ve listened to our other podcasts, you’ll know that this is a personal thing – no two individuals will be able to borrow the same amount of money. It comes down to your income, your affordability, your commitments and ultimately how much you want to spend each month.
That’s the most important thing, making sure this mortgage is affordable to you. We’d go through that full affordability assessment with you to really understand your income and outgoings. We’ll ask you about your future plans as well, to make sure the mortgage stays affordable in the long term. We’ll calculate the maximum amount you can borrow and ultimately what is affordable for you moving forwards.
How can I improve my chances of acceptance?
This is something that’s really key for military personnel. In this type of job you may have lived at multiple different addresses, including BFPO addresses when stationed abroad.
So there are reasons why lenders potentially might not like military mortgages from a credit scoring point of view.
A helpful bit of advice is to make sure that all your address details tie together. Make sure your banking and credit commitments are all registered at the right address. Double check that you haven’t got anything outstanding at a previous address.
Make sure you’re on the electoral roll at the location where you’re in barracks or military property. It’s also very important to keep on top of your credit commitments. Falling behind can put you into adverse credit.
Then the more technical side – understanding the market for you and the lenders that are available – is something that we can help with. We’ll make sure you’re accepted by a suitable lender.
Some lenders have a manual underwriting process where they look at each application individually, rather than letting a computer decide. Those lenders might be a better choice – and that’s where we can really support you.
What happens if I’m deployed?
This is where lenders’ understanding of military life is getting so much better. They will absolutely try and support you in these scenarios. If you’re deployed you might decide to leave your property empty for a bit. A lender will understand that and find a way to accept that.
You might decide that actually you want to rent that property out. Again, we can ask the lender for something called Consent to Let, where they’ll allow you to let your property out whilst you’re away. Or, you might want to leave your family in the property – so you’ve got lots of different options.
Again, we would just talk through your choices if you were deployed to find the right solution for you.
How can Tomorrow Mortgages help?
It’s really important to talk to a broker, because we will take time to understand your individual circumstances. Your payslips may be relatively complicated, so we’ll make sure you understand what that means for your borrowing. Your credit history can also be a little bit challenging because of frequently-changing addresses.
So choosing the right lender to go to is really important – and that’s what we will do to support you in buying the right property. We’ve got really good experience in using Forces Help to Buy, as well. We’ve done multiple different cases with military personnel to buy property. We’re here to help and pass our knowledge on to find the right house for you.
Your home may be repossessed if you do not keep up with your mortgage repayments.