In this article we explain what lenders offer to the Military so you are armed with knowledge going forward.
Often members of the Armed Forces can be penalised through no fault of their own when it comes to military mortgages.
Schemes like the forces help to buy are essential, because they may move regularly or be stationed abroad for periods of time. This can result in their credit rating being effected.
Mortgage lenders may therefore be less likely to accept an application when compared to other mainstream occupations.
Luckily, there are lenders out there who understand, and adopt a more common sense approach.
Allowing for more flexible and unique underwriting criteria for military mortgages.
These lenders are happy with differing income types, or the fact you may be stationed abroad for example.
So, what is out there for the Military?
This mortgage is designed to help get armed forces personnel onto the property ladder.
To be entitled to this scheme, you must be regular personnel. Reservists and veterans will need to apply for the normal help to buy scheme.
There is certain criteria that you must meet to get the armed forces help to buy scheme.
To be eligible for the forces help to buy scheme for military mortgages personnel must fulfil the following criteria:
- Be in Regular service.
- Those serving in the Naval Service must have been accepted onto trained strength, i.e. in a complement billet.
- Army and RAF personnel must have completed two years service from the date of enlistment. Completed Phase 2 training.
- Have at least six months left to serve at the time of application for the forces help to buy scheme.
- In the last twelve months, not have owned a property within 50 miles of the proposed house purchase. (although there may be some exceptions to this).
Armed Forces Mortgages
You may have come across the term ‘armed forces mortgage’. This is essentially a type of mortgage product for those that are in the military.
Unlike the armed forces help to buy scheme, this product is normally available for reservists as well (but not always).
When armed forces personnel are deployed, it was preferable for them to rent out the property they had a mortgage on. This was to cover costs while away from home.
But, for anyone that has a mortgage, it isn’t easy to rent out a property on a residential mortgage product.
Lenders will specify that a mortgage must be changed to a buy to let mortgage.
Buy to let mortgages are mostly designed with property rental in mind. They ensure the homeowner is charging enough rent to make the mortgage payment.
Switching from a residential mortgage product to a buy to let mortgage is not only time consuming, but it can be costly.
Many armed forces personnel either left their properties vacant when on deployment or incurred costs with switching.
Some lenders now offer a specific armed forces mortgage product that allows those who have one to rent out their property whilst deployed without changing the nature or terms of their residential mortgage.
This is an exceptionally good product to have. Especially given how difficult it is to rent out a property on a residential mortgage and really benefits military staff on deployment.
The key factor to Army and Military mortgages is the lenders who offer specific criteria to accommodate specialist requirements.
- military personnel to rent out their property on a standard residential mortgage.
- Armed Forces stationed abroad to purchase in the UK.
- the property to go unoccupied for periods.
- Armed Forces to purchase overseas.
How to Get Started…
Sometimes knowing all the information but not having the guidance can be overwhelming.
This is where we can help you. Mortgage Squared are here to discuss your personal circumstances and what you want to achieve.
You may want to get onto the property ladder, or you may want to switch to an armed forces mortgage so you can rent out your property in anticipation of a future deployment.
You may even be a veteran or reservist that is looking to explore your mortgage options fully. Whatever your circumstances are, we will be able to look through our extensive panel of lenders and insurers to find you the most suitable product available.
And, when it comes to protection, we know our stuff.
Book an appointment here
Or give us a call on 08081 551 807.