Using LSAP as a house deposit

A question about : Using LSAP as a house deposit

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 Ј8500, 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

Best answers:

• His HR dept are talking toss. Buying a house is the sole purpose of LSAP, either they misunderstood or are complete numpties (or both)
• 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.
• 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 -
  https://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
  Quote:
• 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
• 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.
• 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 Ј80.00, with no interest payments.
• The current interest rate on LSAP is 4.75%.
  Just so you know
• 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
• I am currently serving and bought my first house with my partner just over 6 months ago (Yay!!).
  I applied for my LSAP to help boost our deposit and was successful. At the time of application, I only had 2 years left to serve but as soon as the house purchase was through I applied to extend to 12 years which didn't take long to come through.
  To be honest getting decent admin staff who are aware of the ins and outs of LSAP's is pot luck.
  Hope everything gets sorted out soon and good luck with the baby! :-)
• If you are in doubt as to your eligibility to LSAP, then you should fill out the LSAP forms (JPAE024) as if you was going to apply it and state at the top of the forms in red ink "FOR ENTITLEMENT ONLY". They will then get back to you within 2 weeks with an answer. This cuts out the middle man as the rules and regs can be quite confusing.
  Hope this helps.
• Looks like the rules for LSAP have changed a bit since I left. Thought you had to be on a 22 year engagement to qualify (any balance remaining to be paid out of your lump sum on leaving), could this be why the LSAP was refused?
• Wonder if anyone could shed some light pls,
  I have been looking at the JSP 752 and it says that I can increase my payments at any time as long as I meet the minimum payment amount required, however, it does not say how to go about this.......do I just send them a cheque? or can this be done through my pay at source as this would be the easiest option.
  Thanks in advance
• I used LSAP as a deposit for my house of Ј7000 and the mortgage adviser was the one who told me I could use the rest for fees. For me thay did not worry about the fact that this is a loan because the payments once you start making them come directly out of your pay. See if there are any mortgage advisers in the area who understand LSAP as they will be able to help around any of these areas. I hope this is of some help.
• We had no trouble at all applying for and getting LSAP and we completed on our house 3 weeks ago. You apply for it and it gets paid direct to your solicitor. The only thing I will say is that it takes time for all the paperwork to submitted and this did delay our completion by 2 weeks but we were not in a chain so it was not a problem. I think it takes the minimum of 6 weeks.
• Im looking at using LSAP to buy a house and I was told by one of the UPO staff that it is designed for the deposit and legal fees etc etc to buy the house but you have to have a solicitor to get the money payed to who will then issue it out as needed and have a morgage agreed in principle in order for the money to be released..... He also told me that you pay the money back in the last 10 years of service or if you leave before then it comes out of your leaving payment..... Also not sure how true this is but heard a buzz that amount has gone up from Ј8'500 to Ј15'000 but dont quote me on that......