Following the credit crunch in 2008, the government introduced various mortgage schemes to help the market get back on its feet. The first of the schemes were labelled as ‘Help to Buy’ schemes. There was the Help to Buy ISA, Equity Loan and the Shared Ownership scheme.
The government found that these schemes were becoming more and more popular so began creating more schemes to try and help struggling applicants get onto the property ladder. Although most of the schemes target first time buyers, they created a new scheme that was exclusively aimed at armed forces personnel. This scheme also comes under the ‘Help to Buy’ umbrella, being named the Help to Buy Armed Forces scheme.
The scheme is quite simple. It allows regular or retired armed force personnel to borrow up to 50% of their salary, interest-free, to buy a home. This can be used to purchase your first home or to move home if you are assigned to a different location or your family circumstances have changed.
The scheme, originally being brought in in 2014, has now been extended until 31st December 2022. The scheme has an aim to address the low rate of homeownership amongst armed forces personnel.
However, there are some limitations to the scheme. You can only access the scheme if you’ve completed your pre-requisite length of service, have more than 6 months left to serve at the time that you apply or if you match the correct medical categories.
There may be some scenarios where there are exceptions to the who can and who can’t access the scheme. Usually, this relates to personal circumstances or other medical conditions.
Strictly, you can only borrow up to 50% of your annual salary, with the maximum being £25,000. It’s likely that this is going to be more than enough for a deposit, so you can use the rest on other expenses, e.g. solicitor, surveyor or estate agency fees.
As a Mortgage Broker in Newcastle, we do offer our help in getting a mortgage through the Help to Buy Armed Forces scheme. Alternatively, you can seek advice by approaching your chain of command or personnel agency.
If you are interested in the Armed Forces scheme, feel free to get in touch with our team for advice. If you’ve previously owned a property, it may be worth getting in touch to see whether you qualify or not. Even if you are a First Time Buyer in Newcastle, it may be worth checking anyway!