Military Mortgages

[Captain Kirk]

If you are currently serving, thinking of remortgaging your family home but presently living elsewhere for service reasons, then read on:

I recently wanted to remortgage my family home but was frustrated to find that, because I am presently letting it due to service overseas, that most mortgage lenders would only offer buy-to-let products, which incur far inferior terms (rate and LTV).

I argued that it was my main family home and as only my military service compelled me to let it for a short period, I should qualify for residential terms. After getting no-where, I wrote to a number of institutions, including the CEO of HSBC Plc which was my preferred provider. To my considerable surprise, the CEO rang me back the next day, expressed his support for the Armed Forces, confirmed that my request was reasonable and that his staff had failed to follow his policy direction. He put me in touch with his head of mortgage services. Problem solved.

I am presently using this precedent in an attempt to raise awareness among other mortgage providers, so that all military personnel can have fair access to mortgage products irrespective of the circumstances of their service.

I post this as an interim measure to assist any military PPRuNers who may be contemplating remortgaging. At present, only HSBC have acted positively but they offer some competitive products at the moment and, if their support of the Armed Forces generates additional custom, then good luck to them – this alone might prompt other lenders to re-evaluate their policies. Alternatively, the precedent set by HSBC can be used directly in the attempt to persuade other lenders to offer equivalent terms. Obviously, do your own research, use a financial adviser, etc, and I’m not promoting HSBC per se, just giving them credit for a refreshing, and tangible, level of support for the military.

CK

[Mach the Knife]

That is good news, I'll be going there for a quote once my fix is finished. I recently had to let my house due to posting, I have a fixed rate deal at the moment and the company were fine with me letting the house.........as long as I paid the £125 admin charge......every year or re-new of lease whichever comes first. Oh, and accepted a 1% increase in my mortgage rate. Thank you for nothing Newcastle Building Society.

I did write to them as you did with my circumstances, they didn't give a stuff.

[PPRuNeUser0211]

CK - good to hear that the powers that be are being sensible.

It's a fair point to make also that, in general, if you're being stonewalled by a total ignoramus in the customer relations department, and you're sure you're in the right (or at least you have the moral high ground) don't be afraid to drop a quick polite email substantially further up the chain. It can go a long way in the right circumstance, as above.

[2Planks]

Nationwide are very fair as well - no increase in interest rates if in HM Forces and have to let due to service reasons, just have to reapply every three years for permission to let - no charge for this service either.

[Herc-u-lease]

Captain Kirk,

Well done! I'm grappling with a similar isue with Nat***wide at the moment. despite my being unable to live in my house due to posting, they seem happy to charge me an additional 1% interest because I am a "high risk" lend. i.e. they view me as buy to let.

I'd be very grateful if you could drop me a PM with a number or name of someone you have spoken to with HSBC as that sounds like a good starting point for me.

Thank you for your effort and let's hope other lenders catch on!

Thanks

H-u-L

[Canadian Break]

Mods and anyone else that reads this. Would it be possible to have a sticky thread(?) where the sort of information that's been posted above can be put for all to see - and stay there. It doesn't have to be for mortgages - it could be for any retail outlet (big or small) etc that offers us (retired military types) a good deal. If no-one else will help us, lets help ourselves!
Thoughts/comments?
CB

[Pontius Navigator]

I found a superb broker - no fees - advertises in the DT.

We went to him about 7 years ago and he got us a low cost 5-yr fix. When it was ending he rang us up to ask what we wanted to do next.

He got us a no-fee transfer to a very low cost track with the same provider.

Service.

[Captain Kirk]

There are 2 related but separate issues now being discussed:

A number of mortgage providers, but certainly not all of them, will provide ‘Consent to Let’ if you already have a mortgage with them and then subsequently move on, such as on posting. They sometimes impose a small fee but I have discovered that they may even waive this if you explain that you are in the military.

Natwest, Halifax, Lloyds and Woolwich permit CTL.
Halifax and Woolwich will not change the rate and may even waive the admin fee; I am not sure about the others.

Nationwide, Clydesdale, ING and Yorkshire Building Society either will not permit CTL or will change the terms of the borrowing, effectively putting you on BTL rates.
(or at least they all told me this over the phone so if you work for these companies and I am wrong - get better staff in your call centres!)

Trying to remortgage, with a new provider, when you are already letting the house is a whole different ball-game.

Only the Woolwich and now HSBC have indicated that they were willing to offer residential rates and I have not put the Woolwich to the test.

Herc-mate – just speak to the mortgage dept at HSBC (you have to go direct, they do not use brokers) as I am pretty sure that the message have been passed strength 5. If you get no joy, PM me and I’ll help you go nuclear.

Happy hunting.

CK

[cazatou]

Just a thought from someone who is retired and does not have a mortgage.

Should HMG not be insisting that Mortgage Providers offer preferential rates to members of HM Forces who, because of their Operational Duties overseas, are often unable to search around for for the more advantageous rates that are available to the General Public.

It could, in fact, be described as a Public Duty.

[ScrinsonBadger]

Halifax were happy to offer us a residential tracker for 2 years so long as we already had a tenant - our other company wanted to add 6% on to our rate when we moved due to posting. All done over the phone - beware, they will come looking after 2 years!

[Pontius Navigator]

RA, b-locks. He is right.

There are good reasons why a Serviceman should get special treatment.

I was almost stopped from getting my first mortgage because I was a Serviceman buying a house in a foreign country (Scotland).

[Lima Juliet]

Cheltenham & Gloucester are good for CTL. See link for paperwork (even mentions Armed Forces on page 3):

http://www.cheltglos-intermediaries.co.uk/PDF/letting_application_190808.pdf


LJ :ok:

[Belle and Sebastian]

Happy to concur with 2Planks. I sent them an secure email from the website and the form was with me the following day allowing me to rent my house out whilst I went abroad. The whole process was problem-free with no additional costs.

[Jumping_Jack]

Abbey/Santander have consistently recognised the Armed Forces conundrum and have always allowed me a residential rate for my house that is let. :ok:

[Fortescue Fred]

As an ex -flyer, now Financial Advisor/mortgage broker, I have used C & G with great success for military clients who are posted away, as far afield as ........Australia!

Beware though that in the current financial climate, criteria seems to change on a daily basis. you might want to speak to somebody in the know to make sure you've covered off all the angles.

[Krueger Flap]

We've had a very good experience with the YBS. Bought in 2003, lived in for 6 months and had a tenant ever since. Remortgaged in 2008 - all throughout they have accepted this as our 'main residence' and offered us normal mortgage rates.

[Melchett01]

Unless things have changed, HSBC were very helpful when I was looking for a mortgage a few years back. Explained my circumstances and that whilst I intended to live in the property as my permanent home address that might not always be possible. Not a problem as far as they were concerned, just give them a heads-up.

Not always the best interest rates, but very good customer services, and seemingly sympathetic to serving personnel.

[rock34]

I too am with YBS on a long term fixed rate. Couldn't sell the house when posted, so have rented it out whilst moving into SFA. They waived the usual 1% extra that they would charge as part of a 'military discount'. Had to pay a £100 fee but don't have much of a problem with that.

[Marly Lite]

YBS permitted me to rent my house when I had a very short notice overseas posting and remain on a residential mortgage. I paid an £85 fee for the privilege, no problem - very helpful mortgage provider IMHO.

I can't remember whether I remembered to include this on my tax return, but I imagine you could get the cash back against your subsequent tax return. anyone able to advise on this?

[Fox2long]

Not the same but related. I bought a pad close to a remote base and am now struggling to sell. I leave the RAF soon and phoned the H****ax to get consent to lease. Because I'm leaving I get bumped on to the buy to let rate and the rent I'd get doesn't cover the mortgage!! Anyone else been hit with this? Advice welcomed.

[Captain Kirk]

Fox2, IIRC your rent needs to cover 125% of the interest on the loan amount. If you can pay off some of the capital (pension gratuity?) then you may be able to make the sums work - at least it would give you an option. Good luck.

[F3sRBest]

Lloyds said to me a few years back they would honour residential rates when I was looking to buy - never took it up in the end.

Know a great Mortgage broker who I met thru CTP resettlement brief, if anyone is interested in details PM me.

[Fox2long]

Thanks, I've written to the company and await their reply. F3 may take you up on the offer if no joy with the corporate monster.

[The Old Fat One]

Nationwide due not charge their additional (1.5%) permission to let fee to serving military personnel.

I happen to know this as I currently have a case with the FS Ombudsman against their charging me said fee.

Many other financial insitutions do this as well. Many do other charitable acts.

I in no way resent this, not just because I am ex military, but because I can see and agree the special circumstances. Good luck to anybody that cuts a good deal anyway they can.

Please do not however be so gullible to think this is motivated by public duty. It effects no more than a fraction of 1 percent of their mortgage base and they do it out of an opportunistic need to use any means to rehabilitate their trashed public image.

There are quite literally millions of complaints pending about retail banking in the UK (my complaint was raised last May and is no where near the top of the pile yet) and a large majority are about excessive and additional small print charges that are being used to fleece customers as their traditional income streams (ie the ability to loan money) have dried up.

[Whenurhappy]

We bought our first property in the UK near Wootton Bassett in the late 1990s (guess where I was serving?). Our first mortgage lender (our bank) were absolutely useless (and expensively so). We changed the mortgage 3 years later (the lenders let us go early as an acknowledgement of their cock-ups) and since then we have used a well-known brokerage based in Bath, who are fee-free, L&C. The firm, of course, gets a fat finders fee from the lender. We have had about 5 or 6 mortgages since then, all on very good rates and, more importantly, with lenders that understand and accept the 'exingencies of the Service'. Their broker rings me up ever 6 months or so and reviews the situation and has, in the past, come up with some stonking deals...like our current BOE BR tracker!

The important thing is to fully disclose intentions to the propsective lender, such as having to let the property when abroad (there are issues with the Proceeds of Crimes Act 2003 which the lender must be satisfied with and cover off). Our current mortgage lender (C&G) waived the admin fee when we commenced letting the property last year as a top-of-the range holiday let; I wrote to them explaining our situtation, providing evidence that the property would be professionally managed etc, and gently reminding them that in our application we had discolosed the possibility of letting the property because of my Service obligations.

Although I am no friend of the Financial Services industry, I have been pleasantly surprised how many firms will make a genuine attempt to assist Service personnel and their families (probably knowing that their salaries are reasonably secure). In addition to getting permission from the lender to let the property last year, I also got a nice letter back wishing me and the family well, and hoping that I would 'keep safe'.

I do feel for those (mainly Army personnel, it seems) who have been left high and dry by the collapse of the rental and property management agency called 'Blue Force'. Any PPruners affected by this?