Using LSAP as a house deposit

lottie1981

My partner and I are expecting a baby at the end of March, and have decided that we would like to buy a house together, rather than renting (we currently live apart, 170 miles from each other). I am a degree student (final year) and my partner is an avionics engineer in the RAF, with nearly 7 years service.

We have seen a property we love and want to buy, and require a 5% deposit, which we don't have in savings. We were under the impression that my partner could apply for long service advance of pay (LSAP), up to a maximum of £8500, and that this could be used to assist with the purchase of the property (deposit, legal fees etc.).

My partner went to see his human resources department today (at his base, RAF Benson), and was told that LSAP cannot be used for a deposit for a house. We are both now quite confused, as we were convinced that was the purpose of LSAP, because it could be used to pay the difference between the mortgage and the purchase price of the property (i.e. the deposit!), as well as legal fees etc.

Please could someone advise us whether we are correct and should proceed to apply for LSAP for the deposit, or whether the human resources department are right. We'd be very grateful for any help and advice that anyone could offer.

Thanks

Lottie

Andy_L

His HR dept are talking toss. Buying a house is the sole purpose of LSAP, either they misunderstood or are complete numpties (or both)

minirolo2004

What a load of tosh - of course you can use it for a house (Im sure thats what it was created for too)! Get him to go back in and request the paperwork and ask for a LSAP leaflet, this tells you everyhing you need to know. Make sure he speaks to someone who knows what they are talking about.

Alias_Omega

Lottie,

I must refer you to the JSP 752.

The recent copy of the JSP 752 can be accessed through the RAF AirSpace website. Which can be found from here -

http://www.raf.mod.uk/airspace

You will need to get the serving member of the RAF to sign up to the site, to access it. Here they can access the JSP from home, and then you can save it and read what bits you need too.

This is the bible that all claims that are made, are checked against. So if an admin person tells you XYZ, XYZ maybe wrong as you are claiming as having read and understanding the relevant JSP. JSP 752, Chapter 2, Section 4 - LSAP for yourself.


Though, to save you some time, ive copied some bits (this is a sample, not all of the JSP - so take a read of it) from the JSP, to make this post a little more interesting.

Regards,

Alias

JSP 752, Chapter 2, Section 4 - Long Service Advance of Pay (LSAP)


02.0401. Aim.The aim of Long Service Advance of Pay (LSAP) is two fold:

a. To assist eligible personnel to enter the UK housing market; and/or

b. To help meet UK housing needs arising from changing personal circumstances during an applicant’s Service career.


02.0404. Scope of LSAP. LSAP is for Service personnel and is not related to other Government funded schemes, such as the Key Worker Living programme. LSAP is intended to assist towards the balance of the purchase price (taking into account, for example, legal expenses, surveyor's fees, land registration and estate agent's fees) when buying a property for which a Building Society, Local Authority, recognised Bank or Insurance Company is willing to advance a mortgage.

ELIGIBILITY


02.0409. Eligible Service Personnel. Service personnel are eligible for a LSAP provided they meet the following appropriate criteria:

a. RN/RM Personnel. They have been accepted onto the trained strength (ie in a complement billet). For Naval probationary medical/communications technicians this will be on the move from first to second year rates of pay and for officers on completion of the Fleet Board.

b. Army and RAF Personnel. They have completed4 years service from completion of Phase One training.

c. All Personnel:

(1) They have not yet drawn any terminal benefits; and

(2) They have not given notice or applied for early termination unless they have qualified for a terminal grant which is greater than the LSAP, and from which, the loan can be repaid (see paragraph 02.0428); and

(3) They are not under warning for discharge (RN), 3-month Warning Order (Army) or Formal Warning (RAF); and

(4) They are considered suitable in all respects by their CO to receive a LSAP; and

(5) They have more than 6 months remaining before termination from the Services.

Cat695

Be warned I believe (and this is only word of mouth and not fact) that some banks WON'T accept this as a deposit though....as it wasn't saved and is infact a loan (as you do have to pay it back)

But as I said its word of mouth

SarajevoSimmo

Cat695 wrote: »

Be warned I believe (and this is only word of mouth and not fact) that some banks WON'T accept this as a deposit though....as it wasn't saved and is infact a loan (as you do have to pay it back)

But as I said its word of mouth

The Banks/Societys will accept it as a deposit but they will view the advance as another committment (which of course it is as you do have to pay it back at the rate of approximately £80 per month from your salary) and they will take this into consideration along with your other outgoings when considering your suitability for a Mortgage.

13Kent

We considered using LSAP to buy a house, but we discovered that if you rent the house out then you have to pay interest on the loan, and also if you get posted to within 50 miles of the house you are not entitled to a quarter. That's ok if you are planning on living in the house, but if in the future you want to let it out and move into a quarter it could be awkward.

babywillow

We got LSAP when we purchased our house in Sept 2007, we then got posted to Germany in Feb 2008, so we rented the house out after getting permission from the bank etc. As far as Im aware our payments have never changed and we pay just under £80.00, with no interest payments.

oscardog

The current interest rate on LSAP is 4.75%.

Just so you know

lottie1981

Hello all

Thank you very much for all your replies - your advice and comments were very much appreciated

Unfortunately, it looks like its going to be renting for us for a while - we are having difficulty in applying for the LSAP. After being told it couldn't be used as a deposit, we have now been told it can, but is only approved on a 'case by case' basis (so, worryingly, there are no guarantees we'd get it). We are also having a problem with my partner being able to extend from 9 to 12 years service (partly to ensure the LSAP is affordable with mortgage costs etc.) - we've been told this could take 6-8 weeks to arrange, and that there are no guarantees that he will be extended (so could be out the RAF in 2 1/2 years if no extension, LSAP payments would be crippling as a result). Given that we seem unable to get any guarantees of the extension of service, or indeed on LSAP (essential to buy the house), it all seems a bit risky to try and proceed in buying the house. We are very disappointed, but cannot see any way around the obstacles.

Anyway, thanks again for all the advice and comments you gave, you were all very helpful

Lottie x

joe_public_2

Long Service Advance of Pay (LSAP)

ELIGIBILITY

b. Army and RAF Personnel. They have completed 4 years service from completion of Phase One training.

If that's not an oxymoron I don't know what is lol :rotfl: