Do you often dream about leaving MOD housing and buying a home? Do you want to get a foot on the ladder ready for civvy street? Do you have somewhere you already own but it’s just not suitable for your needs?
Buying a home might seem like a legal and financial minefield to you, but with over a decade of experience in financial services and also being military wives, we can truly understand your predicaments and offer you useful advice at the same time.
We are passionate about using our skills and understanding to help other forces families achieve their goals, and we have put together some information and tips on how to make those steps.
You have probably heard of the Forces Help to Buy Scheme by now; this was launched in 2014 and now has less than a year remaining on the trial period that was offered for it (ends December 2019). There are still so many serving personnel who can benefit from this scheme, and we worry people are not taking up the offer because of a lack of understanding around the small print or not knowing where to start.
There’s a lot of information out there, but here are the basics…
- You can borrow up to 50% of your forces salary (up to a maximum of £25,000).
- It is interest free (yes 0%!) and can be used to buy your first home or move to another property on assignment or as your family’s needs change.
- Can be used towards a deposit and other fees like solicitor’s and estate agent’s fees.
- It is an advance of pay, which is paid back over a period of up to ten years through your monthly salary.
- You need to have served for at least 2 years and have more than 6 months left to serve at the time you apply.
As we’ve said, there is a lot of information out there, but here are some things you might not know about the scheme…
- Forces Help to Buy is very different from the standard Help to Buy scheme and are not to be confused with each other.
- You can use this to buy any home i.e. not just new build.
- You DO NOT need to be a first time buyer to qualify for the scheme, so for example, if you are selling your current property to buy another more suitable for your families requirements – very useful if you have a flat that you rent for example but now need a house.*
- You are able to apply for the scheme jointly with a friend or family member – many mortgage lenders offer schemes to compliment this type of purchase now as well*.
- If your circumstances/opinions change after you have bought the property, there is flexibility to rent out or sell the home you originally bought as long as it fits the guidelines detailed*.
- You will also need to be medically eligible*.
*Please refer to JSP 464 for further information, conditions and criteria specific to your situation.
Whilst there are lots of mortgage companies that support the scheme, there are still lots of advisors for both the companies themselves and independent brokers who do not fully understand the scheme, how it works or some cases even heard of it! Do not be put off, find an advisor who knows what they are talking about. A specialist independent broker will be worth their weight in gold for this reason and also because there is more paperwork, processes and people to deal with as part of applying in this way. But don’t let that put you off achieving your dream!
Remember that buying a property is never a quick process but with the right preparation it is possible to get there!
- Check out and improve your credit score. There is a great online tool called co.ukit’s a genuinely free site without trial period offers.
- Make sure you are on the electoral register. Not registering to vote, being registered to vote at an old address, or adding the wrong details on the electoral roll can all affect your chances of getting credit in the future. If you’ve previously, or are currently, posted abroad, then follow this link to get yourself registered to vote https://www.gov.uk/register-to-vote-armed-forces
- Be realistic. Look at your affordability and be realistic about what you can get. Any good mortgage advisor or broker will help you with this – Warning: please be mindful about committing to AGREEMENT IN PRINCIPLES TOO EARLY IN THE PROCESS, this involves a search being done in your name which you might not use if your situation changes.
- Decide what you need from your first home and go in search of it. Be open to considering buying a property, where you are currently posted with the view that you can still move when postings occur…it gets you on the ladder. One step closer to the final plan!
- Spend money on a good solicitor who can move things swiftly and effectively for you.
- Get a survey done. There can be hidden problems that are unforeseen by the seller which could cost you once you are the owner.
Finally, seek out independent advice from someone in the know, who has lots of knowledge of all of the schemes and mortgages available out there and experience with all of the challenges, jargon and packages that military life brings.
Call us at Forces Family Finance on 0330 332 2614 or email us firstname.lastname@example.org to register your interest for more information and financial advice specifically for forces families.
For more information about the scheme from the Government, please see: https://www.gov.uk/guidance/forces-help-to-buy
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE