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Getting a mortgage in the military

Written by Sam Jones on 23 September 2015.

We understand the difficulties in working in the military, often overseas and then trying to get a mortgage back home.

The fact is that many lenders processes are not set up to deal with armed forces living in many different places and abroad.

They are designed to deal with the standard man, woman or family with set incomes and expenditures that can then be assessed for affordability.

But it is still possible to get a mortgage in the military with some lenders creating special rules for those in the Royal Navy, air force or army.

The biggest obstacle is that many armed forces have no fixed address when trying to get a mortgage.

Instead military personnel are assigned a British Forces Post Office number where they can receive post. But it cannot be used to apply for a mortgage as it would fail standard credit checks.

And even those based entirely in the UK move around too often to pass the basic, standardised credit checks needed for all mortgages.

The latest Ministry of Defence statistics from July show 142,000 full-time British military personnel and they could all want homes.

There are a number of Government backed schemes to help military get on the housing ladder from Armed Forces Help to Buy to shared equity schemes.

The schemes are designed to help the armed forces get a mortgage when they return from duty and they are listed as priority on other Government schemes such as FirstBuy.

There is also a Long Service Advance of Pay scheme provides an interest-free loan of up to £8,500 or 183 days’ pay, whichever is lower, as a deposit on a house.

Service personnel qualify for the loan if they have four years’ service in the army, Royal Air Force, Royal Navy or Royal Marines.

They must either be serving with three months or more left to discharge and be medically fit, or have given notice or applied for Premature Voluntary Release.

Some lenders also offer specific armed forces mortgages to help with the unique circumstances they find themselves in.

They generally offer a greater level of flexibility than other deals. For example, some lenders allow military personnel to let their home while they are serving abroad without a change of terms on the mortgage contract.

Others are welcoming to armed forces who want to buy investment property in the buy to let sector by renting out homes while serving.

They are considered niche products and are different to the mainstream deals so specialist advice and support is viewed as key.

It can be a maze navigating the mainstream market but when delving into complex niches ,then mortgage brokers are a must.

Just because you are in the military with the credit checking obstacles does not mean you should give up on mortgages.

With a combination of Government support, lender flexibility and professional advice it possible to serve mortgages for those in the services.

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