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Get your house in order!

Get your house in order!

ARTICLES

07 Nov, 2017

When it comes to buying a house, whether or not you’re a first timer it’s never too early to start planning where you’re going to live on leaving – and, more to the point, how you’re going to pay for it! Luckily there’s a lot of help available – financial and otherwise – to aid your preparations

Home truths

Buying a house for the first time can be a bewildering process. If you’ve never done it before – and, indeed, if you have never had to cope with finding any kind of housing in the private (civilian) sector – the best approach is to compile a ‘to do’ list in the order in which things need to be done, and people, banks, organisations and/or advisers need to be approached. This how-to guide contains some suggestions to help set you on course; advice is also available from the Joint Service Housing Advice Office (JSHAO), which is there to provide you with civilian housing information during your resettlement.

We’ll start with the basics …

Step 1: Start researching an area

Think about where you want to buy your house. Does the area have all the amenities you need in terms of schools, public transport, ability to travel easily to work, shopping, proximity to friends and family? Using a website such as rightmove or Zoopla, you can begin to build up a picture of the availability and cost of property in any given area.

Step 2: Know your financial situation

Buying a house isn’t just about being able to make mortgage repayments. The actual process of buying can be quite expensive. So be very sure about: how much money you’ve already got; finding a stable income on leaving the Forces; how much you can access from a mortgage company and how help-to-buy schemes can help you (see below); and what your buying and moving expenses are likely to be (see ‘Breaking down the costs’). If you are concerned, seek financial advice – but make sure it is independent.

BREAKING DOWN THE COSTS

As a guide, these are the common financial outgoings for a house purchase:

  • an up-front deposit (often 10%+ of purchase price)
  • mortgage arrangement fee
  • survey fee
  • solicitorís fees 
  • stamp duty 
  • search fees
  • removal/storage costs
  • occasionally, one-off fees to service providers to the property to install or update, for example, wi-fi or phone lines
  • building and home contents insurance
  • monthly mortgage.

You should also be aware of Council Tax costs on your property and water rates in the area.

Step 3: Put your mortgage in place

Having found a property, or even before that, you will need to sort out your mortgage. Check all your options (preferably with an independent financial adviser). You may come across:

  • repayment mortgages (you pay back what you owe, with interest, over an agreed period of time)
  • interest-only/endowment mortgages (you pay interest on the loan to the lender and, at the same time, into an investment/savings plan, which - in theory! - will grow enough to clear the balance of debt at the end of your mortgage period).

Mortgages are available through building societies, banks, specialist mortgage companies, insurance companies and even building companies (especially where new-builds are concerned). You can approach these direct or use a broker who can act as an agent.

Most mainstream mortgage providers are supporting Service personnel by offering mortgage products in conjunction with the Forces Help to Buy Scheme (FHTB). There are some exceptions, though, so it is always best to check before you apply for a mortgage. You can do this by looking on their websites, asking in their branches or phoning them. Alternatively, if you are planning to use a mortgage broker, make sure you disclose your use of FHTB at the outset and that they subsequently inform potential mortgage providers.

In addition, check out our ‘Get help to buy’ section below, for more information on the kind of schemes currently available to help you finance a property purchase.

Step 4: Your new house

A house is often the most expensive thing we buy. Before you commit legally (the point of exchanging a contract with the seller), make sure you are absolutely happy with all aspects. It is most important to know you have a structurally sound building; this can be determined by a detailed survey – another cost to add to your list.

Step 5: Know the legal process

You will need to engage the services of a solicitor. Personal recommendations are a good starting point. Failing that, use a small independent firm that deals specifically with house buying/selling. Your solicitor will liaise direct with the seller’s solicitor and will obtain detailed information regarding searches in the local area. Your solicitor will also deal with the exchange of money from your mortgage lender to the seller (including your deposit on the property), and with HM Treasury regarding stamp duty – a compulsory tax based on the purchase price of your property.

How the JSHAO can help you

The remit of the Joint Service Housing Advice Office is to work with Service personnel during their Armed Forces career right up to the point of discharge (and occasionally beyond for those still occupying service accommodation beyond their last day of service). Its aim is to help not only those who are about to leave the Services, but also those who are thinking about housing early on in their career. Anyone is welcome to get in touch with the JSHAO: the Service person themselves, a spouse or a dependant, say.

Additionally, the JSHAO delivers the ‘Housing, the Options’ programme and ‘Housing Solutions’ briefings, both with slightly different remits. There are about 60 Options briefings a year, in the UK and overseas. These are mainly aimed at those Service personnel in their last two years of service, but are open to those even just considering their civilian housing options prior to resettlement. These briefings include expert advice from independent financial advisers (on how to get mortgages), solicitors (how to proceed on a house purchase) and government appointment agents, to talk about Affordable Housing schemes that are available to Service personnel in the UK (see below).

To find out more about the JSHAO, visit www.gov.uk/government/collections/joint-service-housing-advice-office-jshao

Housing Matters magazine

The JSHAO produces a quarterly magazine called Housing Matters. This aims to provide relevant information to its readers, in as timely a fashion as possible. It focuses on different regions of the UK, particularly in relation to local authority information, and contains information and articles designed to help you when you are considering your civilian housing options. For an index of articles it has published to date, see www.gov.uk/government/publications/housing-matters-magazine-index-of-articles-published

CLICKS FOR BRICKS
Visit these links to find out more about current help-to-buy schemes and housing options

Get help to buy

Forces Help to Buy Scheme

The Forces Help to Buy Scheme was launched in 2014 as a three-year pilot scheme, but has now been extended to 2018. The scheme could enable you to borrow up to 50% of your salary, to a maximum of £25,000, interest free. This loan is towards buying your first home or moving to another property on assignment or as your family’s needs change.

You are eligible if you:

  • have completed the prerequisite length of service
  • have more than six months left to serve at the time of applying
  • fulfil the right medical categories.

There may be instances where exceptions to the standard rules may be justifiable, especially where you have extenuating medical and personal circumstances.

You can apply for the loan online through the JPA system and can seek advice on your application through your chain of command and personnel agency. Full details of eligibility and qualifying criteria can be found in JSP 464 Part 1 Chapter 12.

Other government-backed housing schemes (see below) can be used together with Forces Help to Buy.
To find out more about FHTB, visit the JSHAO or Army Families Federation websites (see ‘Clicks for bricks’), or download full details at www.gov.uk/government/uploads/system/uploads/attachment_data/file/575676/JSHAO-03-FORCES_HELP_TO_BUY_Dec16.pdf

CIVILIAN HOUSING BRIEFS

Housing Briefs are open to all Service personnel and their families, at any stage of their service career. To book a brief at a location administered by the Career Transition Partnership (CTP) call the central CTP telephone line on 0203 162 4410. If you are in Resettlement, you will need to complete a Non GRT Absence Request on JPA after making your telephone booking.

A regularly updated full programme of upcoming Housing Briefs is available at www.gov.uk/government/publications/joint-service-housing-advice-office-jshao-civilian-housing-briefs

Government Help to Buy schemes

The government has created several Help to Buy schemes to assist people in buying their own homes.

CLICKS FOR BRICKS

Visit these links to find out more about current help-to-buy schemes and housing options

Finally …

Buying a house is a big financial and emotional investment. The anxiety can be minimised by finding out as much as you can in advance using professional advice sources such as the JSHAO, which is geared specifically to Service personnel needs.

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