Forces Help to Buy: Additional Advice

As Ex Forces Veterans we understand better than anyone the need to secure a home before your career ends and you have to move out of your SFA. 

You’re in safe hands with advice from ex-military advisers, whose advice is not only fit for purpose from a navy  mortgage point of view, but is also up to date with the lifestyle you currently lead. 

Rest assured we aren’t just any old civvy in a suit, who doesn’t have a scooby about the life you lead and the problems faced. We don’t work civilian 0900 to 1700 Monday to Friday hours but have comms via text, WhatsApp, email and Facetime after working hours, to fit in with your FOE. We are experts in navy mortgages.

Forces Help to Buy: Additional Advice

How do I apply for the Forces Help to Buy scheme?

Initially it’s done on JPA so you would need to log on to JPA, complete the questionnaire and get an initial assessment advising whether or not you fit the criteria, the documents need to be printed and signed off.

There are several people that are involved with the sign off such as the med centre for them to say that you’re not downgraded, you’re fit to fight and deployable. It then goes through the chain of command, including the Commanding Officer who signs it off, before it goes back to the respective admin office. So for the Army, it’s the APC in Glasgow and then obviously the Navy and RAF have different admin centres.

What information is needed on the application form?

Apart from the usual information you expect any military form to have, you’d need to have found the property first, because the form asks you to complete the details of the house you’re going to buy.

The details of the solicitor you’re going to use are also going to be required. We can supply you with ‘Forces friendly’ solicitors’ details and we get quotes from quite a few of them, so it will be a competitive price.

Don’t worry if the purchase falls through because you can always amend the property details at a later stage, but initially, you will need to state what type of property you’re buying, the purchase price, the address and how much of a deposit you are putting into it.

Do I complete the Forces Help to Buy application first or apply for the mortgage first?

We suggest that you do a financial review with us first, to help you obtain an Agreement in Principle from a lender. This means that they have most of your information, have done a credit search and are happy to lend you the money.

We can’t then complete the full application form, until you’ve been issued with what’s called a pin. That’s not a PIN code like your bank card PIN code, it’s a personal information letter from the MOD stating that you’re entitled to the money and how much they’re prepared to give you. The PIN letter then has to be supplied to the lender because they need to know where you’re getting your deposit from.

What proof of the Forces Help to Buy deposit does the lender need?

To comply with money laundering regulations and make sure you’ve got the funds available for the deposit, a lender will require proof of that deposit and where it’s from. If it’s savings, they’ll want the bank account statements. If it’s an ISA, they’ll want proof of the ISA.

If it’s a Forces Help to Buy deposit, they’ll ask you for the PIN mentioned previously.

Will all lenders then lend to me if I’m using Forces Help to Buy?

No, unfortunately not all lenders are going to lend to you if the only deposit you have is Forces Help to Buy deposit. Some lenders have subscribed to the scheme, but because it’s a loan; however, other lenders will not lend to you.

Will lenders penalise me if I’m using the Forces Help to Buy scheme as a deposit and have bad credit?

This does depend on how bad the credit score is. Lenders who deal specifically with bad credit mortgages have slightly different criteria, and until we know how bad the credit situation is, it’s impossible to know whether you’ll be accepted.

Talk to us in advance, send us a copy of your credit file and we’ll see which lenders we may be able to use based on your individual circumstances. You should expect to put in at least 10% of your own deposit on top of the Forces Help to Buy, when using a bad credit lender.

Will I pay any additional income tax if I take the Forces Help to Buy scheme?

If you’re borrowing up to £10,000, there’s no tax liability, but anything over £10,000, HMRC will treat it as a benefit in kind from your employer, which will increase your monthly tax bill slightly.

It’s deducted from your wages just like any tax. The simplest way to explain it is that, if as a civilian I get a company car and can use that company car on my days off, I get taxed for it. As your employer is giving you an interest free loan, when you should be paying interest on it, the government classes it as a benefit in kind from your employer. Therefore, if you borrow £15,000, £5000 of it will be liable for benefit in kind tax.

Am I better off using my own savings as a deposit instead of the Forces Help to Buy deposit?

This is completely dependent on the individual’s financial circumstances. It’s well worth chatting to us in the first instance, to decide. Remember, however, that £10,000 is interest free with no tax liability, so it’s the cheapest form of money you will ever borrow.

Will some lenders expect me to put in some of my own savings as well as the Forces Help to Buy money?

Some lenders will accept just your Forces Help to Buy deposit and some will still expect you to put in 5% of your own money. It’s worth checking with us so that we can find a mortgage lender that will suit your circumstances, whether you want to offer additional deposit or not.

Does the Forces Help to Buy money get paid to me or a solicitor?

The MOD pays the money directly to your solicitor, and your solicitor puts it along with any other form of deposits that you’ve got and any other money being borrowed from a lender and pays it directly to the seller’s solicitors.

How do I contact Ideal Home Loans for help?

Our advice is to fill out the enquiry form, pick up the phone, establish communications with us and we’ll communicate with you whenever we talk to you in a language that we both understand and give you the advice you need about mortgage, Forces Help to Buy or anything in between. The advice is completely free, even if you need a few weeks to come back to us with further information.

Please remember your home is at risk if you do not keep up repayments on your mortgage.