Help to buy ISA - Deposit issues

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chamelious
chamelious Posts: 116 Forumite
in Mortgages & endowments
Hi all, my GF and i are currently saving for our first house and were counting on the 25% bonus from the Help to buy ISA scheme. Can anyone help me understand this article:

http://www.telegraph.co.uk/personal-banking/savings/help-to-buy-isa-bonus-buyers-had-no-idea-it-wasnt-for-a-deposit/

From what i can see, it means basically we can't use the HTP ISA for the deposit, which is confusing, what else can it be used for?
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  • Ed-1
    Ed-1 Posts: 3,892 Forumite
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    chamelious wrote: »
    Hi all, my GF and i are currently saving for our first house and were counting on the 25% bonus from the Help to buy ISA scheme. Can anyone help me understand this article:

    http://www.telegraph.co.uk/personal-banking/savings/help-to-buy-isa-bonus-buyers-had-no-idea-it-wasnt-for-a-deposit/

    From what i can see, it means basically we can't use the HTP ISA for the deposit, which is confusing, what else can it be used for?

    It is used for a mortgage deposit, not the deposit that has to be given to the seller at exchange of contracts.
  • chamelious
    chamelious Posts: 116 Forumite
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    Can you clarify please? I was only aware of one deposit being required when purchasing a house.
  • Mogley
    Mogley Posts: 250 Forumite
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    Point 10 in this link http://www.moneysavingexpert.com/savings/help-to-buy-ISA
    You should pay attention to the needs of the moment - otherwise there is no future. But to ignore the future is foolish - living solely for the moment leaves nothing for when the next moment arrives.
  • chamelious
    chamelious Posts: 116 Forumite
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    I'm still confused.

    " At this point the seller will usually ask you to put down a 10% deposit (sometimes it can be negotiated lower to 5%) to secure the property. "

    So your house is 100k. You pay for your 10% at 10k, the "home exchange deposit" . What is left to pay now? What is the second deposit?
  • kingstreet
    kingstreet Posts: 38,768 Forumite
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    If you have agreed to put down 10% ahead of exchange of contracts, that is what you do.

    If you are contributing more to the purchase, you do that ahead of completion when you also hand over balance solicitor fees and stamp duty.

    FWIW the thing you cannot use towards your deposit ahead of exchange of contracts is the HTB ISA bonus, not the HTB ISA investment.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • chamelious
    chamelious Posts: 116 Forumite
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    Why would you contribute more in the short amount of time between exchanging contracts and completion?
  • kingstreet
    kingstreet Posts: 38,768 Forumite
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    If, for example, you want to pay 50% deposit on your new purchase, you put down 10% ahead of exchange and pay the rest ahead of completion.

    Exchange and completion may not be close together. We are newbuild specialists and these are often six months apart.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • chamelious
    chamelious Posts: 116 Forumite
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    I highly doubt any first time buyers are putting down 50%, and if they are they aren't going to care about stuff like this.
  • kingstreet
    kingstreet Posts: 38,768 Forumite
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    Your supplementary questions caused the thread to move away from the substantive issue of the HTB ISA into other areas.

    The answers given weren't designed purely for the HTB ISA fraternity alone as others may read this later and see something they find useful.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • chamelious
    chamelious Posts: 116 Forumite
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    Fair enough. I guess i join a large community of first time buyers frustrated by this.
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