It’s the dream for many – but buying a home can be much more complex than you’d think, especially when you’re leaving the Forces. We take a look at what support is out there to help make the process more straightforward
Becoming a homeowner is a pretty great feeling – but the path to property ownership doesn’t always run smooth.
Whether you’re still serving and looking for a home outside of service accommodation or you’re going through the resettlement process, home buying can be a daunting task. Getting a mortgage can be complex, as lenders want to make sure they’re giving money to someone who can pay it all back and on time.
It’s not all doom and gloom, however. There are support services out there to make the process smoother.
Before you start applying for mortgages, you’ll need to know what you’re able to afford and find a property that’s within your budget. The Money Advice Service (www.moneyadviceservice.org.uk) have a useful online calculator which helps you figure out realistically how much you can afford to spend on mortgage repayments each month alongside all your other monthly outgoings.
Take into account too things like legal fees, valuation fees, stamp duty for properties over £125,001, electronic transfer fees and even removal costs – all of this can really add up, so make sure you have money set aside for all of this.
To get help with the process, some people choose to use a mortgage adviser or independent financial adviser. All you have to do is give them all of your details, and they’ll go find the best deal for you. The adviser will find the deal with the least interest and most security.
Whether you’re using an adviser or looking to arrange your mortgage yourself, one path you might choose to go down is the Forces Help to Buy Scheme, which was introduced in April 2014. This allows service men and women to borrow an interest-free advance of up to 50% of their salary (to a limit of £25,000) which can be used towards your deposit. This is paid back over ten years through your monthly salary. Most banks and building societies offer this, so it’s worth finding out more if the deposit is a hurdle for you.
Other schemes to help you get on the property ladder include Help to Buy ISAs where the government contributes towards you deposit saving, the Help to Buy scheme and shared ownership. Head to the Money Advice Service site to get a better understanding of what all of this means.
Shop around too – it’s tempting to take your mortgage from the bank or building society which you bank with, but it’s not necessarily going to be the best deal. What you want from your mortgage is to pay back as little as possible. With interest rates and various fees, you’re never going to pay back simply what you’ve asked to borrow – but by choosing a good deal, you’ll get closer to that figure.
Money Supermarket (www.moneysupermarket), Which (www.which.co.uk) and Money Saving Expert (www.moneysavingexpert.com) all have easy to use mortgage comparison tools, where you can input how much you’ll have for a deposit, how much you’re looking to borrow and the proposed term, and it will show you what all the major mortgage providers are offering.
There are a number of Forces-specific charities and organisations out there who can offer support to make home-buying a less stressful experience, including Forces Mutual (www.forcesmutual.com), Money Force (www.moneyforce.org.uk) and Armed Forces Financial Services (www.affs.co.uk). If you need help understanding the process or advice on who to talk to, get in touch and see what they can do.
Home ownership may be costly, but having a place to call your own is a great feeling – and it’s definitely not out of reach. Start making contact with relevant organisations now to see if this is an option for you.
MORTGAGES: THE BASICS
- A mortgage is a loan taken out to buy property or land
- Most mortgages run for 25 years, but can be shorter or longer
- If you don’t keep up with your repayments, your home may be repossessed
- When buying a home, you’ll need a deposit to go towards the cost of the property – lenders usually ask for 10% of the value, but the bigger the deposit, the better rate you’ll get