Another LSAP question..... 4 March 2010 at 3:57PM in UK armed forces MoneySaving 9 replies 3.1K views

Chimaera

I have been doing some research regarding LSAP and having read JSP 752 am still none the wiser and hoping you may be able to help!

Having read other info on the web about LSAP there are several references to it being secured via a second charge on the property being purchased. There is however no mention of this is JSP 752. There is however mention of a promissory note which I understood merely to be a 'promise to repay' in other words like a loan agreement. Has anyone taken LSAP recently and can enlighten me? Also was the process straightforward? Many thanks in advance!

TAFFYCLAIRE

Hi, my husband used LSAP two years ago for our first home. It was quite straight forward, by be warned as you may know the MOD are not the quickest to process things. When we took out our LSAP, there was a charge put on the house, but i believe they have now changed this and a charge is no longer put on a property. We found it easier to deal with a mortgage advisor who had experience of LSAP, as he would tell us exactly what was needed and knew which mortgage providers that would accept this as a deposit.

Starrystarrynight

As far as I remember, the MOD don't register a charge on the property. The money would just be recovered from your lump sum, I believe, if it wasn't repaid by the time of discharge/retirement.

Chimaera

Thank you both for the info. It all helps in making the decision to apply or not!

Starrystarrynight

It was very popular, as I remember. It's probably about the best loan you can get. An interest free one! I think it was paid back over 10 years at approx £70 per month. As HMRC will view it as a taxable benefit in kind, there will be a slight adjustment to the tax code, but it wasn't much.

0james0

LSAP is definatley changing! I have now seen a document with my own eyes that said an amount of up to £75,000 may be available.

A client of mine is bringing a copy in to me to keep as I deal with so many forces clients.

From the skim read I had, it looks very similar to the My Choice Homebuy agreement that came out in 2008 and was very popular.

Chimaera

£75,000! Goodness that's a big jump. Really appreciate the update - no doubt there will be an official update soon..........

stephenni1971

0james0 wrote: »

LSAP is definatley changing! I have now seen a document with my own eyes that said an amount of up to £75,000 may be available.

A client of mine is bringing a copy in to me to keep as I deal with so many forces clients.

From the skim read I had, it looks very similar to the My Choice Homebuy agreement that came out in 2008 and was very popular.

LSAP is definitely NOT changing.

What you have seen is an entirely different scheme available only to those with between 3-6 years service.

Trying_to_be_good

As stephenni says, there's confusion here between LSAP and the new (highly restrictive) pilot scheme being run, which is like the HomeBuy ones. LSAP isn't going up any time soon, and remember you get taxed on the benefit of having the loan.

LSAP used to involve having a second charge placed on the property, but now doesn't. You will need to declare the source of the money (i.e. that it's a loan) to your mortgage lender, if you're using it as the deposit.

Good luck with your house purchase!

gingerUK

Hi there, I got my house 3 years ago to the day and used LSAP as part of my deposit. At the time it was divided by the time I had left in contract which was 4 years. Works out at around £163 per month out your wage. If you extend your service this can be re-calculated to reduse payments. The first mortgage company wouldn't accept this as they said it was another loan. IT IS NOT A LOAN . Advance of you wages. Took around 6 weeks from putting in the paperwork which was fairly straight forward to geting the cash to broaker. The only clause I was aware of is that if you terminate your contract early then you have to pay back the remaining amount within a certain time period which is quite large.

Hope this helps slightly