How does repayment work under the Military Help To Buy Scheme?
Accepting a loan under this scheme means paying back the loan over 10 years, with monthly instalments are taken off from your pay every month.
The good news is that there is completely no interest to pay! In accepting an interest free FHTP loan, nevertheless, you will need to pay a modest insurance payment, which will also be deducted from your wages every month. You can expect that this monthly payment will be no more than around £6.50 per month or less, based on how much you actually borrow under the scheme. This insurance policy will ensure that any outstanding loan to be entirely paid off should you either get a medical discharge or pass away while still serving in the UK military.
Are my partner’s house and earnings taken into account?
Provided that the house is only in their name on the property deeds, it does not matter if your partner owns their own home. This fact will be disregarded if you apply for an FHTB loan. However, the flipside is that you can not both get FHTB to assist in the purchase of a larger house if your partner is also serving in the UK Armed Forces. Only one FHTB loan is permitted for each flat or house.
Can I use this loan to help pay off my existing mortgage?
Forces Help to Buy was created to assist first-time buyers, or those who are moving home – so the answer is No.
Can the scheme require early repayment?
The outstanding balance will have to be paid off if you accept a loan under the new scheme but leave the military before you have completed your repayment. Your terminal benefits can be used to help clear any outstanding loan, as confirmed by the government.
Can I take out 2 loans by using both the Government Help to Buy scheme and FHTP?
Is FHTB available for making changes to my home?
You cannot use the loan just to enhance or expand your current house. But, if your current property is not appropriate for medical or other family reasons, then it is likely that you could get a FHTB loan.
What happens to AFHOS and LSAP?
Neither of these earlier schemes are available at present for new applicants. LSAP [the Long Service Advance of Pay loan] has been suspended. AFHOS [the Armed Forces Home Ownership Scheme] has now shut down entirely. As a consequence, new applications for loans under these schemes are not being accepted at this time. If you have already accepted a LSAP loan, you can carry on paying your regular repayments every month. Nevertheless, if you are looking to move house and you already have an LSAP loan, provided that you are entitled under the new Forces Help to Buy rules, you can apply to increase the amount borrowed to the new FHTP limit (which is up to half of your annual salary, with a maximum loan of 25,000).
What happens if I am then posted overseas and want to go accompanied, but I have purchased a property using FHTB?
You can keep your FHTB loan. However, if you decide to lease your property, while the home remains let, you will need to pay interest on the amount outstanding under your loan.
Does securing a FHTB loan mean I’m guaranteed a mortgage?
Sadly no. Being awarded a loan under the Forces Help to Buy scheme ought to help your application though, so do make sure you inform the mortgage company. But you will need to apply independently for a mortgage, so there are no guarantees.
Do I need legal advice?
Under the Forces Help To Buy scheme, you do not have to do obtain legal advice to apply for a loan. Still, to assist the purchase of your property, you are going to need a conveyancing lawyer. So it does make sense to choose a law firm which truly understands the military, and how to deal with drawing down your Forces Help To Buy loan.
Assistance with filling in the forms
The government recommends that you get guidance through your chain of command and personal agency, should you require help with the application form itself.
Buying a new property using a FHTB Scheme? Our Specialists can help
Here at law firm, Bonallack and Bishop, we are specialists in representing HM Forces. We represent hundreds of serving military personnel every year, with a wide range of legal issues – from courts martial, to and divorce to using LSAP or the new Military Help to Buy scheme.
We can help you purchase your home using the new loan scheme wherever you are currently based – at home or overseas.
- Call now locally on  422300 or on FREEPHONE 0800 1404544 for a FREE quote OR
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