Qualifying Service Personnel
This scheme is available for regular armed forces personnel who have served no less than 4 years and no more than 6 years at the date of application. The scheme is not available to Reserve Forces or Military Provost Guards
Legal Fees will include payment for services provided by your Solicitor during the purchase of your property, and post sales activities such as full or partial redemption of the AFHOS Equity Loan, sale of the property, or Porting the AFHOS Equity Loan to another property. Fees will also be incurred during the application for your mortgage and sourcing your HomeBuyers Report (not needed on new properties), and will be paid to your mortgage lender.
Stamp Duty (Stamp Duty Land Tax - SDLT) is payable on properties purchased at over £125,000, and is currently 1% of the property price. If the property price is above £250,000 the SDLT is 3% of the property price. Please check www.gov.uk and search for SDLT for the latest information.
Name on Deeds
Whilst you may not have a mortgage and own a property, your name may appear on the Deeds of other property, for example your parents may have asked you to be on the Deeds of their property, or you may have inherited Deeds to land or property, or you may still be on the Deeds of a property after a relationship breakdown.
An Equity Loan is an amount of money given to assist with the purchase of your property. It will be classed as a 'second charge' (see next item) on your property after the mortgage (the First Charge). On the AFHOS scheme there is no interest to be paid on the Equity Loan whilst you remain in the Armed Forces.
A second charge is a legal charge on your property in favour of a 'lender' and will appear on the Title Document issued by Land Registry on completion of your purchase. The 'first charge' on your property will normally be your mortgage. With AFHOS, the second charge is the money given to you under the AFHOS Equity Loan, and will show as the Homes and Communities Agency on your Title Document but is administered by Swaythling Housing Society (Radian). This charge would be repaid to Swaythling on the sale of the property or under full redemption.
Standard Variable Rate
The Standard Variable Rate (SVR) is the main mortgage interest rate charged by a lender. The Royal Bank of Scotland (RBS) SVR, which is used to calculate the interest rate on the AFHOS Equity Loan after you've left the Armed Forces, usually tracks the Bank of England Base Rate (although it is not linked to this rate).
An Independent Financial Advisor (IFA) is a qualified professional who will be able to advise you on your financial suitability for progressing on AFHOS, but who is not affiliated to any mortgage lender, bank etc, and is therefore able to offer impartial advice on the best option for your financial needs.
Power of Attorney
A Power of Attorney (PoA) is someone you appoint to act on your behalf for legal/financial affairs when you are not able to, for instance they could be appointed to sign legal papers for the purchase of your property when you are deployed overseas. Your solicitor will be able to advise and even act as your PoA.
Porting is the term used to take, or 'port', your existing AFHOS Equity Loan to another property. For example you may need to move to a different part of the country for your work and wish to buy a property close to work. You would therefore sell your existing property, repay your existing AFHOS Equity Loan, and a decision would be made as to whether you would be able to use the AFHOS Equity Loan again with a new property.
Loan to Value (LTV)
Loan to Value (LTV) is the amount a mortgage lender is prepared to lend you against the value of your property. For example if the property was valued at £100,000 and the mortgage lender's maximum LTV for a scheme was 75%, the maximum mortgage would be £75,000. To look at LTV another way, if your property is valued at £100,000 and you have a mortgage of £65,000, the LTV is 65%.
A mortgage is a loan you take out from a mortgage lender (bank, building society, specialist mortgage lender) to buy a property. This will be shown as the 'first charge' on the Title Document for your property. Your mortgage is the most important payment in your household and must be your first priority. Your home is at risk if you do not keep up mortgage repayments or payments on other loans (the second charge for example) secured on the property.
A Joint Mortgagee is a second or third person whose name(s) appears on the mortgage deed alongside yours and is jointly responsible for keeping up repayments on the mortgage.
A HomeBuyer Report (HB) is a survey of your property carried out by a member of the Royal Institute of Charterered Surveyors (RICS). The HB will e a detailed inspection of the property, both inside and outside, and will highlight any potential issues, for example damp, woodworm, failed double glazing, utility problems etc. An HB is not a full structural survey.
The IQF is the form submitted to Swaythling by your IFA after your financial assessment has been carried out. The IQF is submitted along with your financial documents, ie Payslips, P60, Bank Statements, ID, Savings etc. We will then carry out a further assessment and contact you regarding the interview.