Forces Help to buy Scheme

The Forces Help to buy Scheme.

The Forces help to buy scheme (FHTB) is a Military of Defence incentive that allows serving members of the armed forces to borrow money in the form of an advance. Borrowings can be up to half their yearly salary before tax deductions and up to a maximum of £25,000.

The loan is provided to contribute towards the fees of the purchase price of a home, considering the deposit, legal, land registration etc. 

If you are considering taking advantage of the FHTB scheme, it’s good to know that most brand mortgage lenders accept the loan as a form of deposit for your chosen purchase. 

Who can apply for the Forces Help to buy Scheme?

The scheme is typically designed for first-time buyers and those moving to another property, in circumstances where they have been assigned elsewhere or because of specific extenuating family or medical incidents. 

The property for which the FHTB has been claimed for must be intended solely for the service person’s own residence, or that of their immediate family. One exception to this rule can apply to those in overseas postings at the time of the application process and subsequent purchase.

The scheme loan is not intended for the purchase of a ‘buy-to-let’ property or any other second property. However, under some circumstances, the FHTB can be used to adapt or extend an existing owned property.

Eligibility Criteria

Eligible personnel must first and foremost be in regular service. 

For those currently serving in the Royal Navy, they must have already been accepted onto trained strength. 

Army and RAF participants must have completed at least two years of service from the date of their enlistment and be on trained strength, for example they have completed their Phase two training. 

When applying it is necessary to have at least six months service remaining at the time of the application. 

It’s worth noting that you do not have to be married or have children to be eligible, single service members of the armed forces can also apply.

How to apply for the Forces Help to Buy scheme

You can apply for the loan online through the Joint Personnel Administration system and can seek advice on your application through your chain of command and personnel agency.

How Much Do I Have To Pay Back?

Your repayment amount will depend entirely on how much money you borrow. However, your loan will be divided over ten years and you will pay back that amount monthly or also make overpayments. 

You are able to start making loan repayments straight away, six months after receiving your funds or in your final ten years of service.

Can I Leave The Forces After Receiving FHTB?

You are able to leave the forces after receiving your loan, yes. However, if you are due any terminal benefits such as a resettlement grant, your outstanding FHTB loan balance will be deducted automatically from it as a result. Ideally your outstanding balance should be paid before leaving.

When Is The Forces Help To Buy Scheme Ending?

The Government has announced that the FHTB scheme will be extended until at least 2022.

What Are The Forces Help To Buy Scheme Interest and Insurance Costs?

As a member of the scheme you will pay 0% interest on your loan. However, you will need to cover a small amount of insurance each month to protect your loan.

The relevant Insurance cost typically works out £6 – £7 each month in proportion to how much you originally borrowed.

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