Has anyone used LSAP when buying their house??

[SandyChick]

Hello, as the title says really. We've just had an offer accepted on a house and are using LSAP as part of our deposit.

DH has spoken to the people who deal with it and he has the forms etc. Our Mortgage broker and solicitor are aware and have experience with LSAP.

Are there any pit falls we should know of??

DH used it as part of the deposit on his flat he bought before we got married.

We bought our house 2 years ago and there was something that you had to move so many miles away to be eligible for LSAP again.

In the end we transferred the loan onto our new house and only moved 6 miles away and didn't have any hassles.

It helped DH out a lot and he didn't experience any problems.

Good luck with new house

we used it when buying our house , we live in now as we had to double our morgage when we moved from Scotland to Lincolnshire. the houses were literally double the price .
We have had no problems with it and the solicitor was not bothered by it. HTH

dh was talking about this but i dont really understand it.

how much can you get and how do you pay it back?

I thnk it was £5000 when we got it but not sure if they have increased it over the last 4 yrs.
Knowing anything to do with the forces ,probably not.

Its up to £8500. You pay back 10% per year over 10 years. It is either as a deposit on house or to do extension. Its more complicated than that but basically thats what it is.

As DH has more than 12 years left to serve we dont have to pay anything back for 2 years then it will be £70 per months direct from DH pay.

We used it but you have to be aware that borrowing anything over £5000 means that you have to pay tax on it up front (we would have had to pay 40% which meant that there was no point in taking anything more). We took the maximum allowed tax-free and had no problems with our sale going through, although we had to explain the whole procedure to the solicitor.

It's JS Form JPA E024 (introduced 09/07).

If a spouse/civil partner is a member of the Armed Forces or Civil Service the loan can only be taken out by one party.

We also did the same as jscot did 4999.00 so not to pay tax on it, it all went through fine, as have many of our friends.

do you have to have so many years service left when you take it out?

i.e dh has 10 years to go but we are not thinking of buying till dd is at school next year and i am back full time, so he will prob have about 8 years left by the time we wanted to use it.

If dh has less than 10 years of his commission/engagement left to serve you have to start making payments as soon as you take out LSAP.

You can take it out in a couple of years time or so - just means less time to pay it back.

I checked with the tax office today about paying tax on £8500 LSAP. Its classed as a beneficial loan as its interest free so you pay tax on the cash equivelant (basically if it wasnt interest free). If you only want upto £4999 you wont pay tax. DH will be taxed at source so will work out at around £80 per tax year.

He has more than 12 years left to serve so we dont have to make any repayments on LSAP for the first 2 years then you pay 10% per year over 10 years. You can pay back sooner if you want.