Armed Forces mortgages

Mortgage issues facing Armed Forces workers

Armed Forces staff can face a wide range of challenges when searching and applying for a mortgage. The breadth of issues is extensive, but some of the most common revolve around stipend income, long periods of living abroad with a lack of UK address history, and objections to immediately let out the property after settlement. We explain these below.

Stipend income

Armed Forces personnel could receive stipend income – including bursaries - and wish for this income to be factored into their mortgage application for increased borrowing. Not all lenders will take into consideration this type of income. There could still be lenders willing to include stipend income. This problem and realistic solutions are best discussed with your mortgage adviser.

Living abroad and lack of address history

Some Armed Forces workers will be stationed abroad for extended periods and could spend recurring periods overseas throughout the year. Consequently, staff in this situation might not have an adequate UK address history in the view of the lender. The positive news is that many lenders are privy to this situation and will still allow Armed Forces personnel to apply for a mortgage with a lacking address history, provided they provide the right documentation. An Armed Forces mortgage broker can assist in overcoming this common issue.

Consent to let out the property while away

Armed Forces workers may be serving abroad when they secure their residential property in the UK. In this scenario, they might want to let out their property until they return. Not all lenders allow this as letting out a property usually requires a buy-to-let mortgage. However, as the case study in the section below proves, mortgage advisers can get around this hurdle.

Armed Forces mortgage case study

Our mortgage advisers have helped Armed Forces staff get suitable mortgages despite various challenges. One of our most memorable clients was an Armed Forces worker who wanted to get a residential mortgage to buy their first home. However, they were working away and wished to let out the property while they were serving abroad and then live in the property when they returned. 

This presented a challenge because most mortgage providers only permit the buyer to live in the property when taking out a residential mortgage, as opposed to a buy-to-let mortgage. Our mortgage team worked tirelessly to find a suitable mortgage lender that was willing to agree to let the client let out the property while serving abroad. This enabled the Armed Forces worker to get on the property ladder despite their unique circumstances and request.

Armed Forces mortgage how-to guide

First-time buyers are encouraged to learn about the mortgage process. The information below is also useful to Armed Forces workers who aren’t buying for the first time but wish to refresh on the latest information.

Improve your chances of mortgage success

Mortgage advisers can help you best prepare for your home-buying journey. In the lead-up to the mortgage search and application, you should aim to improve your credit score. This will improve your chances of getting approved. Finance professionals can help you take action to improve your credit rating even if you’re currently located out of the country. There is misinformation online, and the best advice can only be sourced by accredited professionals.

How to find an Armed Forces mortgage

To find a suitable Armed Forces mortgage, you’ll need to search the mortgage market and uncover which lenders offer discounts or other bonuses to members of the Armed Forces. These aren’t always easy to find, especially if they’re not explicitly advertised. If you do find an Armed Forces mortgage, always check that you meet that particular lender’s eligibility criteria. This part of the process can be much quicker and easier with the help of a specialising broker.

Applying for an Armed Forces mortgage

Once the right mortgage has been identified, you are strongly recommended to apply for pre-approval for that mortgage product. This will provide you with a mortgage in principle with the lender and inform you of how much you’re able to borrow. You can then use this information to start your property search. Keep in mind that mortgage products are subject to change.

Further resources for Armed Forces staff

We previously discussed the Forces Help to Buy Scheme, which is a real opportunity for Armed Forces members wanting to get their first foot on the property ladder. Further information about Forces Help to Buy can be found on the UK Government website here. You can also ask related questions to a Public Sector Mortgage adviser.

For more generic information about mortgages and the buying process, we recommend using the Money Helper website. This is a UK Government website and a source you can trust. It provides key information on complex topics in an easy-to-understand way.