Forces Help to Buy, first launched in April 2014, is designed to provide financial assistance to those who are thinking of buying their first home or moving to another property.
In this article you’ll find the answers to the most common questions relating to Forces Help to Buy.
Who is eligible for Forces Help to Buy?
You can apply for a loan from Forces Help to Buy as service personnel as long as:
- You are in regular service. Forces Help to Buy isn’t available to those in the Reserves, Territorial Army or the Military Provost Guard.
- You are in the Royal Navy and have been accepted onto trained strength.
- You are in the Army or RAF and have completed two years’ service from the date of enlistment and are on trained strength i.e. you have completed Phase Two training.
- You have at least six months left to serve at the time of application.
Forces Help to Buy isn’t limited to those who are married or have children, single personnel can apply as well.
How much could I receive?
Forces Help to Buy allows service personnel to borrow the equivalent of 50% of their gross annual earnings, capped at £25,000.
What can I use Forces Help to Buy for?
The Forces Help to Buy loan can be used towards funding the balance of a home purchase, taking into account:
- Your deposit
- Legal fees
- Surveyor fees
- Mortgage fees
- Estate agency fees.
Can Forces Help to Buy be used alongside other Help to Buy Schemes
Yes, you can use Forces Help to Buy in combination with other Government backed Help to Buy schemes.
Do I have to buy a new build?
Forces Help to Buy can be used to purchase both new build properties and existing stock. If you use Forces Help to Buy in combination with another Government backed Help to Buy scheme, you’ll only be able to buy a new build.
Is there a fee for using Forces Help to Buy?
A Forces Help to Buy loan is interest free. However, you will have to pay a small insurance premium, typically £6-£7 a month to protect the loan.
How do I repay the loan?
Forces Help to Buy loans are arranged over a ten-year period, during which you pay back the loan on a monthly basis through your payroll.
You can begin paying your loan back immediately, six months after receiving the money or in your last ten years of service.
Can I leave the forces after receiving Forces Help to Buy
In a word, yes, although there are some caveats to be aware of:
- If you are due to receive any terminal benefits on leaving, any outstanding balance from Forces Help to Buy will be automatically deducted.
- Where possible you should aim to repay the Forces Help to Buy loan before you leave the military, but if you can’t, you’ll continue to make repayments once you have left.
Will my mortgage lender accept Forces Help to Buy?
Most major mortgage lenders will accept the use of Forces Help to Buy for the deposit for your property purchase. Make sure that you inform your mortgage broker that you intend to use Forces Help to Buy so they can take this into account when arranging your mortgage for you.
Can I use Forces Help to Buy to buy a second home or a buy to let?
Forces Help to Buy is intended to assist first time buyers or those moving to another home. It can’t be used to assist with the purchase of a second home or a property you intend to let out.
Can I rent out my house in the future?
If you’ve used Forces Help to Buy to help with paying the deposit on your home, you may be wondering what happens if you’re posted to another location. In this scenario, if your property is further than 50 miles from your place of work, you can let out the property and you’ll be entitled to service accommodation.
You’ll need to make your mortgage lender aware of your change in circumstances and seek ‘consent to let’. You can do this by speaking with your lender directly.
You’ll be expected to live in your home if any future postings are within 50 miles of your property.
How do I apply for Forces Help to Buy
You can ask for advice on the scheme through your Chain of Command and Personnel Agency, and apply by logging into your Joint Personnel Administration (JPA) account through the Defence Gateway.
What Next?
Now you have a good understanding of how Forces Help to Buy works, you can make an informed decision as to whether it’s right for you.
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