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On this episode of the Mortgage and Protection Podcast. Mark Nottley from Total Home Loans joins us to talk us through the Military Mortgage process.
The above podcast includes information which was correct at recording, some information may have changed. See the below page for up to date information.
Are there specific mortgages for military personnel?
There are certainly specialist mortgages available, which have particular elements that suit military personnel. A lot of brokers and some smaller lenders may class themselves as being military mortgage providers. But these are all independent of any military organisation – they are simply brokers and lenders like any other.
Mortgages for military personnel are more focused on the difficulties you might face with gaining approval. It may be that you are living at an overseas address or on a UK base which makes it more difficult – particularly with credit searches, which are a crucial part of lending.
Some lenders will give military personnel extra leeway, to allow for times where they may be overseas. They may ask for further information but it will let them provide more flexibility.
How does the application process work for military mortgages?
In the same way as a normal application, it’s a case of providing information to the broker. That might include whether you are going to be deployed in the future and will be away from home for periods of time.
Your mortgage broker can then discuss this with a lender. There are certainly certain mortgage providers that are more flexible and will encourage people in the military to get a mortgage. So there aren’t specifically military mortgages – just greater flexibility. Some lenders do understand the military more than others.
In terms of application, it’s a case of providing as much information as possible about your current situation and your future status. That way we can present you with options that may suit your particular circumstances.
Should you buy a home while on active duty?
It’s never nice to look at the worst case scenario, but if something were to happen to you on active duty – or training – it’s all about getting yourself covered.
If you’re looking to take on a mortgage, the broker and lender will explore what happens if your income stops coming in. The right insurance policies will support you on that.
The answer is you can buy a home when you’re on active duty, and it’s down to what the lender deems is the risk at that time. There are certainly some lenders that don’t offer mortgages to those on active duty but generally it’ll be down to having cover if something happens.
What mortgage assistance is available for military personnel?
It’s definitely better speaking to a broker. You can go to lenders direct but it’s a long and drawn out process, especially if you’re in a complex situation. A broker can help you find a suitable mortgage and we can tell you about the schemes available to help you buy a home.
The main scheme at the moment is the Forces Help to Buy scheme. People in the armed forces can borrow up to 50% of their salary as an interest free loan to help buy their first home. It gives you a deposit for a property – you can pay the loan back over time or when you sell.
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The general Help to Buy scheme is now closed to new applicants – is that the same for military personnel?
Forces Help to Buy scheme has been permanent from 01/01/2023. You should keep your eye on the government’s guidance website as funds can be limited.
How much can I borrow on a military mortgage?
With any mortgage it comes down to your income and expenditure. Military income is guaranteed, which makes it simpler. We will look at your expenditure and see how that might change. For instance, if you are abroad on deployment you get extra income and your costs reduce because you’re living in accommodation provided by the military.
Some lenders provide you with extra affordability and let you borrow more depending on how regularly you are deployed. Some people are deployed once every two years or once every three years for six, nine or 12 months at a time, receiving bonuses to their additional wage. This can be used towards your income if it’s regular and can be proved.
Obviously we don’t want to encourage anyone to borrow any more than they can afford to pay back – just in case that deployment was to stop in the future.
How can I improve my chances of acceptance?
It’s all about credit history. A bank will lend to someone if they can prove that they can borrow money and pay it back responsibly. If your credit history is good then obviously you’re going to be seen as a good prospect for a mortgage.
Some people have had a few problems but that doesn’t mean these mortgages won’t be available. The more information you give about your situation the better. You’ll still be able to get a mortgage in most cases – let your broker look into your circumstances and ascertain the best route for you.
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What happens if I’m deployed?
If you’re deployed and your house will be empty for a period of time, lenders usually don’t like that. It could be broken into – if there’s no activity around the house it can become a target. There could be a water leak over that period of time that damages the property.
To get around this, if you’re deployed for six months or maybe a year many lenders would allow you to temporarily rent your property out. That also means you have additional income coming in. Lenders are more happy for you to have people living in the property even on a temporary rental basis than for it to be empty.
Once you have a mortgage, if you’re deployed, contact your broker. We’ll contact your lender and deal with it from there.
Why is it a good idea to use a broker for a military mortgage?
Brokers are worth their weight in gold. You will get lots of extra information and much more flexibility than you can get going it alone. Brokers have a lot of professional knowledge that will help you. There are certainly lenders that are much more easy to deal with in terms of the military and some who are a little more prickly about future deployments.
If you work in the military you have a good, guaranteed income and future prospects. Property is an excellent long-term investment. So I recommend anyone to speak to a broker to get yourself a mortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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