LSAP Home Loan

[grousehunter]

Could someone tell me when "Phase 1" of training is complete? According to JSP 752 you are eligible for a Loan of up to £8500 if you have completed 4 years since the end of Phase 1 training. As NCO Aircrew when is that? Was it from Basic, or from when you become Substansive Sgt? This Loan would be really useful at the moment as I'm trying to get the funds for a house!

Thanks

[Whaaa newark]

Just a thought, but maybe there is a better place to ask this question. Possible PSF (if that still exists) or maybe your Adj or even live on the edge and phone the JPA hotline.

No Whaaa

[Duncan D'Sorderlee]

Not sure when 'Phase 1' trg ends, but I thought that the different Services had different LSAP arrangements (I thought that in the RAF you had to be aged over 35): an Adminer should be able to tell you :O

However, be aware that if you take the full £8500 you are liable to tax; anything over £5k is taxable!

Duncan

[mbga9pgf]

Not sure when 'Phase 1' trg ends, but I thought that the different Services had different LSAP arrangements (I thought that in the RAF you had to be aged over 35): an Adminer should be able to tell you :O
However, be aware that if you take the full £8500 you are liable to tax; anything over £5k is taxable!
Duncan


Since JPA, its not just the old and crusties who are entitled to LSAP (after all, with house prices as Bl@@dy rediculous as they are, its not them who needs it!)

AS regards tax, I did a bit of digging into this a few months ago, any loan over 5K gets taxed at a rate equivalent to that paid for a TYPICAL mortgage... the "APR" for the tax is set on an annual basis (so beware if IRs go up) dependent upon comparable mortgage "Swap" rates. Dont know anything about the Phase 1 training, I am guesing, but reckon it could be basic?

[TrickyTree]

I'm an instructor in a Phase 3 training establishment but please don't take what I say as being gospel, you might want to check it out yourself. This is my understanding...
Phase 1 training is, in RAF terms, either Recruit or Initial Officer Training. Phase 2 is basic trade or branch training. Phase 3 is post graduate training, like all my students (sorry, "learners" - PC-Cert Ed speak!) who are doing an aircraft specific "Q" course. How it converts into NCA terms I've no idea.
The RAF Manual of Training is on the intranet but I'm on leave right now so I can't refer to it.

[Fg Off Kite]

Just have a think before you take advantage of this interest free loan as it may end up costing more than you think.
When you take out a mortgage, the lender has a charge on your property, which means that they have first shout if your house is reposessed. When you use a LSAP, the RAF take out a legal second charge on the property to make sure that they get paid too. This costs money, the solicitors want their cut!
If you take advantage of a fixed rate mortgage and then subsequently want to change it after 2 or 3 years, you will have to get solicitors to untangle the first and second charges on your mortgage, which won't have to cost much to wipe out any advantage of the LSAP.
You might like to take some 'proper' advice, but when I did it afew years ago it was more hassle than it was worth to have a second charge on my house so I just paid tne LSAP back.
Just as an aside, the LSAP was designed years and years ago to give you a significant step into the housing market to make up for our nomadic lifestyle. Then it was worth having, but as ever, with the massive upsurge in the housing market, it is really not worth the hassle for the paltry sum of money.
Anyone else??

[frodo_monkey]

A few of us on the Sqn are in the 'first time buyer' position and so under the new JPA rules are applying for LSAP - the end of Phase 1 training for me was the end of Initial Officer Training, so I guess for you it would be 4 years after the end of your OACTU (or whatever its called) training. The AP is on the Intranet under the Allowances section - you can also put in a 'For Entitlement' claim which basically means the bods at AFPAA work out how much you can have and when.

Hope this helps!

[grousehunter]

Cheers guys I have looked into it more myself now and have read the JSP in more detail. As for PSF...well they are closed to all but "the most urgent matters" due to JPA. Nice. Think I will go for an application in a few weeks. Thanks again.

[Unmissable]

mbga9pgf is correct, look very carefully, this deal is not as good as it looks. If you borrowed £8500 and the inland revenue decide that the average mortgage rate is 5% then you have had a benefit of £425 each year which is taxable (probably at 40%). Therefore this benefit is now costing you £170 per year to have.

Then realise that the Inland Revenuse's 'notional' mortgage rate is a lot higher than you can buy on the high street. (so you could have got the loan at 4% from a high street bank, therefore the differenec between the £170 the loan is costing you from MOD and d a 4% motgae rate( £340) is £170/.

Add that to the cost of setting up, the cost of transferring this charge to any subsequent mortgage (see posts above). Then you have to pay this loan back within 10 years. If you took the loan because you were short of cash, what is the impact of having to pay large amounts back each month, when if you had used a standard mortgage with the spread of interest being be over 25 years?

The overall benefit is negligible for the avrage Aircrew officer. The hassle and commitment is just not worth it.