Mortgages for Servicemen

[FootTapper]

Ok so I'm looking to buy a house, and need to be able to sub-let it for when I'm not there.

I have 25% deposit to put down, I'm wondering if anyone has experience of any financial places that take military service into account when making a decision as my credit file isn't great?

(It's not horrific, but it's less than perfect due to previous indiscretions a few years ago)

 

[I`m Ron Burgundy?]

Ok so I'm looking to buy a house, and need to be able to sub-let it for when I'm not there.

I have 25% deposit to put down, I'm wondering if anyone has experience of any financial places that take military service into account when making a decision as my credit file isn't great?

(It's not horrific, but it's less than perfect due to previous indiscretions a few years ago)

I got my mortgage 5 years ago, got turned down by Halifax initially for one missed credit card payment - got another mortgage advisor who told me that different companies have different lending criteria and a bad credit rating isn't always taken into account. I got a mortgage with RBS who only cared about how much cash I had in the bank...however this was back in the days of easy credit...

 

[hugo_a_go_go]

Natwest still use "affordability" rather than 3-4 times salary

 

[JPJ83]

I'm looking at getting a buy-to-let now, whilst living in service accommodation.

Has anyone looked at mortgages recently? Any tips on providers that are more sympathetic to Armed Forces borrowers? My outgoings are clearly fairly low, compared to people on similar salaries to me, so can afford a reasonable mortgage at the moment...

Any thoughts?

 

[Belle and Sebastian]

Mortgage stuff

Mortgage stuff

I've got a mortgage with Nationwide who do not load any additional interest to the loan if you then let the property if you are in the services. All I did was to send them an email to the Customer Service desk via the website and they sent me a application which I sent back and is valid for 3 years. If I'm still letting the property in 3 years time, then I need to apply again.

I have had the house about 10 years before I let the property so the rules might be different if you are buying a house purely for BTL but it still worth asking them.

 

[AlienFB]

I got a mortgage with Northern Rock about six years ago (I know, I know before they went belly up and got bailed out!) and at the time did not envisage going overseas.

Four years later i got a last minute oppertunity posting to Cyprus which i grabbed. Northern Rock let me sub let my house after paying a small fee (£250) and sending them proof of posting on the understanding i would be taking up residence again after it.

I think most companies operate a similar system for the Services you just got to ask and be able to back it up with eveidence.

 

[Sixty Percent Overlap]

I'm in a similar position. Mrs Sixty and I have approx 40 grand saved and we are keen to buy (approx £150,000 - £175,000) upon my return from Ops in Jan 11.

Not interested in taking out LSAP although I do have 11 years left until LOS 30 but we want to buy very soon if I wish to bang out in 3 years time upon completion of LOS 22. Just want a simple (if one exists) repayment mortgage that my pension (expected at level 7 high pay band Sgt @ LOS 22) will cover as we do have quite a healthy deposit. My credit rating is particularly good too.

Although I'm not that keen (I just want a home for the family) but have not discounted it, the missus and I have also discussed letting out our future home until I decide to leave the RAF at 22+ years.

A tall order I suppose but between now and Jan 11, the missus and I will be doing our research but any any advice will be very much welcomed.

 

[vim_fuego]

My brother is a branch manager for the Skipton and deals with my mortgage...countless times we have moved around and needed a change to the deal and he has gone to his bosses and explained in plain english my situation and what would help us and they have always come through without charging me a fee...They look at it from a risk angle most times...will this move or alteration increase the risk to us getting the money back? If the answer is no then they tend to be fine.

 

[chief remf]

Just cleared one mortgage for 80k and then had a devil of a job getting a new one for 35k. Never missed a payment in 18 years but had become a temp and not on contract. Had to become single as it needed less affordability. Married and with kids I was too much of a risk. For renting best I could find was the coventry building society. To quote my mortgage advisor there is more than one way to skin a cat. Most now do affordability rather than straight 3 or 4 times your salary.

 

[busby1971]

I'm in a similar position. Mrs Sixty and I have approx 40 grand saved and we are keen to buy (approx £150,000 - £175,000) upon my return from Ops in Jan 11.

Not interested in taking out LSAP although I do have 11 years left until LOS 30 but we want to buy very soon if I wish to bang out in 3 years time upon completion of LOS 22. Just want a simple (if one exists) repayment mortgage that my pension (expected at level 7 high pay band Sgt @ LOS 22) will cover as we do have quite a healthy deposit. My credit rating is particularly good too.

Although I'm not that keen (I just want a home for the family) but have not discounted it, the missus and I have also discussed letting out our future home until I decide to leave the RAF at 22+ years.

A tall order I suppose but between now and Jan 11, the missus and I will be doing our research but any any advice will be very much welcomed.

Nothing wrong with getting on the property ladder, strongly recommend it but I would be wary of renting out the property I would hope to live in, although there are benefits as well as negatives.

Negatives, the house might get trashed.

Positives, you can do up your house and off set the cost against your rent.

Also if you just buy a rental property you don't have to settle in that area and can move anywhere when you come out, release the equity whilst waiting for the sale and buy another place where you want to live.

 

[clungemobile]

I would recommend speaking to London and Country advisors - down to earth and very, very helpful - they will tell you how it is! (01225) 343 088

Also, the forums on www.moneysavingexpert.co.uk are helpful

Cheers

 

[Sixty Percent Overlap]

I would recommend speaking to London and Country advisors - down to earth and very, very helpful - they will tell you how it is! (01225) 343 088

Also, the forums on www.moneysavingexpert.co.uk are helpful

Cheers

Ta clungemobile, been examining the L & C website and iPhone app and I've got to say it's the most easy-to-understand one I've viewed thus far. Mrs Sixty is more savvy than I when it comes to our finances and also uses Martin Lewis' website all the time.

 

[SORRY CJ]

I'm in the middle of getting a house I asked the question bout house letting.

When I had a mortgage in 20 odd years ago I had to let when I was posted I had to pay an extra 2% on top of the deal, but I have no idear what of if you have to now. However, I was told now that if you buy to let you will prob need 40% deposit.

Hope This Helps?

SCJ

 

[Joe_90]

Nothing wrong with getting on the property ladder, strongly recommend it but I would be wary of renting out the property I would hope to live in, although there are benefits as well as negatives.

Negatives, the house might get trashed.

Positives, you can do up your house and off set the cost against your rent.

Also if you just buy a rental property you don't have to settle in that area and can move anywhere when you come out, release the equity whilst waiting for the sale and buy another place where you want to live.

You missed Captial Gains Tax Busby, I've been renting my house out for 6 years now due to Service reasons and that nice chap Mr Osbourne will most probably help himself to about a third of my deposit on my next house. Ah well we're all in in this together and it's important that my family don't have as good a life as they could do so that children born to underage mothers, who's own mothers were also teenage slappers, actually end up with more choice in life than we have.

 

[busby1971]

You missed Captial Gains Tax Busby, I've been renting my house out for 6 years now due to Service reasons and that nice chap Mr Osbourne will most probably help himself to about a third of my deposit on my next house. Ah well we're all in in this together and it's important that my family don't have as good a life as they could do so that children born to underage mothers, who's own mothers were also teenage slappers, actually end up with more choice in life than we have.

No I didn't, you only pay tax on the gain, you have an annual allowance of £10,000 at the moment, which if you have shared the ownership with a partner or other relative can be doubled (you have to have complete trust in your relatives) and unless you are a high rate tax payer CGT is only 18%.

If you'd put the money into a normal savings account the rate would probably have been naff, you would have paid 20% of tax on all of your gains if you use up your Tax Allowance.

There's pro's and cons to all situations but if you want to save to buy a house there is no better investment to track the market than a house.

 

[shish, chop.. halloumi.]

If you're in the market to buy or rent, this makes worthwhile reading.

http://www.mod.uk/DefenceInternet/D...ing/TheHomebuySchemeMortgageRescueengland.htm

http://www.mod.uk/DefenceInternet/DefenceFor/ServiceCommunity/Housing/AffordableHousingSchemes.htm

http://www.mod.uk/DefenceInternet/D...y/Housing/MinistryOfDefenceReferralScheme.htm

 

[FootTapper]

Just to update from my original question...



Halifax (my bank) offered me a mortgage, so I put in an offer on a house, then Halifax changed their mind. They'd made me a "mortgage promise" based on 75% TLV, then a week later decided their rules had changed and they now only offered 70%.


So, with an offer in on a house, I went to Santander. Santander told me I would be charged extra for a BTL mortgage. But, if I wanted a homeowner mortgage, but became unable to live in the house through RAF moving me around, then I could get permission to sub-let for no charge.

So I told Santander I wanted to live in the house, and would do as soon as I could move nearer. They gave me a homeowner rate, on 75% LTV, with permission to sub-let.


I picked a house just down the road from where my parents lived. This meant they can run the rental for me (and I pay them the letting agent fee) as I trust them far more than a random company who don't actually give a toss about me, but who might be expected to make important decisions on spending while I'm OOA.
I chose a house I'd be happy to live in, in a part of the country I'd be happy to live in. If I leave the RAF and need the money for a house then I can always sell up. But if I bought a place that was purely a rental property I'd have to sell it should I ever need somewhere to live.
The downside of picking a place you're happy to live in, is that it may reduce the rental Yield you can expect. Often the properties that have the best Rental Yield aren't always the ones you'd want to own to live in.

For anyone looking to get a BTL while they stay in SSA, SFA or wherever - I'd say go for it. Having someone else help pay your mortgage while you're enjoying the cheap forces accomodation is a good thing.

Possibly the single biggest, most important and most expensive (if you chose badly) decision you'll make is which tenants. You can't spend too much time checking them out, either with credit checks, interviews, chasing up genuine references from previous landlords etc etc. So far I've got lucky, I've got a working single mum with two kids, who's very house proud and who really thinks of the place as a "home" rather than just somewhere to stay.