LSAP

Discussion in 'The Corps' started by toycommandos, Oct 18, 2007.

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  1. I used LSAP to assist me in getting a flat, 2 years down the line and currently going through the re-mortgage process. I have found that having LSAP is not as good as they make out (£8500 interest free loan). Your tax code changes and also despite the UPO saying you don’t pay it off until the last 10yrs of your service you pay an insurance premium for having it. Another thing they don’t tell you is that its not just an interest free loan but infact a second mortgage! This means when going through a re-mortgage then Pusser has to give their approval for the new mortgage. So far this has taken nearly 8 weeks and caused me to pay out nearly £300 in additional mortgage payments.

    Has anyone else had a similar nightmare with it????

    I advise anyone who is considering using it to seriously think about it and also if they do decide to take it out, pay it off ASAP!!!!!!
     
  2. Indeed I have. I got out of it early!!
    Although its interest free its not tax free, which of course is in the small print somewhere. Your tax code will go back to normal when you have £1500 pounds left on your LSAP.
    Pusser also has a second interest in the property which basically means should you get repossed or anything else where you have to give up the house then they have second helpings to the value of it after the mortgage has been paid off.

    Although I didn't do it, it may be worth paying off your LSAP via getting a larger re-mortgage on your property. If its financially viable of course.
     
  3. sgtpepperband

    sgtpepperband War Hero Moderator Book Reviewer

    I think the clue is in the name "LSAP" - it is not a loan, but an advance of pay. But despite this, the MOD are classed as a 'third party' in the mortgage contract, so it is quite right that they have some involvement in further proceedings; some mortgage companies will not offer you a deal if you have taken LSAP (although this is more likely to be due to ignorance, rather than any illegal activities). The capital of the advance is not paid back until your last 10 years, but the premium paid that you refer to is similar to the one on an insurance policy; an adminstrative fee to keep the contract 'active'.

    Despite the relatively minor risk of complications as stated, I still agree that LSAP is a valuable tool in getting service personnel onto the property ladder - although I think the amount should be increased to 6 months pay, rather than the ceiling amount of £8500).

    I am sure "Rosinacarley" will have more to say on the matter as she is a conveyancing expert and may give a much better explanation than me, and may offer some appropriate advice.
     
  4. SPB you are simply too kind, although please remember that my charge out rate is now £150 ph!
     
  5. Have to say my experience is some what different, no problems with it at all. It was still cheaper, in my case, inclusive of the tax etc than borrowing it on a 25 year mortgage.

    Horses for course perhaps.
     
  6. £150 per hour - bloody hell rosie i known good hookers cost less.
     
  7. I took out an LSAP in '74, it was the only way the wife and I could put down a deposit, (and pay the Solicitors fees), as I was only an "erk"(and in lervvvvvve {and lust}) at the time, I know it commits one to staying on for pension. Anyway it was a good move for us.
     
  8. sgtpepperband

    sgtpepperband War Hero Moderator Book Reviewer

    Yeah, but... feel the quality! :money:
     
  9. TC, all of this information is in the LSAP instructions. Also in there is the line (paraphrasing)The applicant is required to read and understand all regulations regarding the application" (although in my experience most applicants can't actually be bothered to do this but will say they have). IIRC when you actually sign your application there is also a line on there saying that it is your responsibility to ensure that this is what you want to do. They also make very clear that a Charge (Lean?) is required against the property as this is the only way to legally ensure they can get the money back (if you went AWOL for example). I think this Charge is always second in precedence to the primary mortgage held to purchase the property and noted in the application. If you believe that an individual in you UPO misled you and you can name that individual then you should do so. The basic explanation of tax is that every year HMRC set an interest rate and amount of interest. They then calculate your mean loan (amount owed in Oct) and apply the above. If the amount of interest is above the permitted level you pay tax on the excess as unearned income.

    None of this helps you but I believe that LSAP is a very good option for getting on the housing ladder. The max advance hasn't changed for years but if buying a flat it is still around 10% of what is needed (in some areas obviously not!).

    IMD
     
  10. Hooker lawyer lawyer Hooker and the difference IS?????

    Number two daughter is a Lawyer, and I thought I had brought her up to be careing and compasionate.......How wrong a Father can be. She would charge here mother for a letter, unless it was requesting money for her funds :bball: :bball: :bball:

    Rosie your charges are very reasonable please send me your card.. I could put some work your way :thumright: :thumright: :thumright:
     
  11. All done now. It has been an education!!!!
     
  12. oo have just noticed this. There will be no feeling of any kind.
     

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