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    • rocketsauce
    • By rocketsauce 22nd Sep 16, 11:46 PM
    • 8Posts
    • 0Thanks
    rocketsauce
    Help to Buy ISA
    • #1
    • 22nd Sep 16, 11:46 PM
    Help to Buy ISA 22nd Sep 16 at 11:46 PM
    Hi,

    I've never owned a home and have always rented.

    I meant to get a Help to Buy ISA when they first came out but didn't get round to it. I saw news articles saying that the ISAs were a con because you didn't get the money until after the purchase of the property.

    I've read the advice on here but wondered what people think, is it still worth getting one?

    I'm considering it as I feel I should at least try to save something towards a deposit. I feel like I'll never be able to save enough though!

    Thanks
Page 1
    • eskbanker
    • By eskbanker 23rd Sep 16, 12:23 AM
    • 3,413 Posts
    • 3,026 Thanks
    eskbanker
    • #2
    • 23rd Sep 16, 12:23 AM
    • #2
    • 23rd Sep 16, 12:23 AM
    I saw news articles saying that the ISAs were a con because you didn't get the money until after the purchase of the property.
    Originally posted by rocketsauce
    Not sure where that myth comes from but the government's 25% bonus is only usable towards the property purchase and has to be contributed to the funds used in the transaction, so ignore anyone claiming it's afterwards!

    Some were under the mistaken impression that the bonus would be available for use when exchanging contracts rather than at transaction completion, but the official line on this has always been clear, even though those who didn't read enough of the small print are often vocally unhappy about this.

    So I'd say go for it, where else will you get that sort of return on your money?
    • shoaibs48
    • By shoaibs48 23rd Sep 16, 5:22 PM
    • 8 Posts
    • 1 Thanks
    shoaibs48
    • #3
    • 23rd Sep 16, 5:22 PM
    • #3
    • 23rd Sep 16, 5:22 PM
    The rates on help to buy isas are better then normal isas by a mile. The 25% bonus is used to reduce your morgage repayments and not added onto your deposit which is what the confusion was.
    • thomasfox
    • By thomasfox 23rd Sep 16, 5:39 PM
    • 16 Posts
    • 3 Thanks
    thomasfox
    • #4
    • 23rd Sep 16, 5:39 PM
    • #4
    • 23rd Sep 16, 5:39 PM
    The 25% bonus is used to reduce your morgage repayments and not added onto your deposit
    Originally posted by shoaibs48
    True, it cannot be used to increase a deposit, but you can cover/fund any other upfront purchasing costs as well as your mortgage repayments.
    • xylophone
    • By xylophone 23rd Sep 16, 5:42 PM
    • 18,403 Posts
    • 10,321 Thanks
    xylophone
    • #5
    • 23rd Sep 16, 5:42 PM
    • #5
    • 23rd Sep 16, 5:42 PM
    but didn't get round to it.
    I'm considering it as I feel I should at least try to save something towards a deposit.
    "If not now, when?".....
    • eskbanker
    • By eskbanker 23rd Sep 16, 5:48 PM
    • 3,413 Posts
    • 3,026 Thanks
    eskbanker
    • #6
    • 23rd Sep 16, 5:48 PM
    • #6
    • 23rd Sep 16, 5:48 PM
    The rates on help to buy isas are better then normal isas by a mile. The 25% bonus is used to reduce your morgage repayments and not added onto your deposit which is what the confusion was.
    Originally posted by shoaibs48
    True, it cannot be used to increase a deposit, but you can cover/fund any other upfront purchasing costs as well as your mortgage repayments.
    Originally posted by thomasfox
    Not sure if it's what you're suggesting but just to be clear, the HTB bonus can't be used for mortgage repayments or purchase costs other than the property itself and is used for increasing a deposit (thereby effectively reducing the mortgage value) but the key thing is to understand that the term 'deposit' means different things to different people.

    http://www.moneysavingexpert.com/savings/help-to-buy-ISA#exchange explains that the HTB bonus is used as part of the deposit at the time of completion of the purchase (i.e. the gap between mortgage and property value), but some use the term 'deposit' for the advance fee paid earlier in the process (exchange rather than completion), which the bonus can't be used for. See also https://www.helptobuy.gov.uk/help-to-buy-isa/faq/#can-i-use-for-deposit
    • Flobberchops
    • By Flobberchops 23rd Sep 16, 7:56 PM
    • 357 Posts
    • 216 Thanks
    Flobberchops
    • #7
    • 23rd Sep 16, 7:56 PM
    • #7
    • 23rd Sep 16, 7:56 PM
    Go for it. Even if you end up using a HTB ISA as a glorified cash ISA for anything and everything but a house deposit, you're still earning several times more interest than in a standard cash ISA.

    It reduces your cash ISA subscription allowance? Good, you should be investing in stocks and shares anyway
    • rocketsauce
    • By rocketsauce 24th Sep 16, 9:23 AM
    • 8 Posts
    • 0 Thanks
    rocketsauce
    • #8
    • 24th Sep 16, 9:23 AM
    • #8
    • 24th Sep 16, 9:23 AM
    Hi,
    Thanks for all your help.
    Am I right in thinking that once the money is in the ISA you can't take it out?
    I'll have a browse of the different ones, not sure where the best rates are at the moment.
    • marliepanda
    • By marliepanda 24th Sep 16, 9:40 AM
    • 3,464 Posts
    • 6,706 Thanks
    marliepanda
    • #9
    • 24th Sep 16, 9:40 AM
    • #9
    • 24th Sep 16, 9:40 AM
    Hi,
    Thanks for all your help.
    Am I right in thinking that once the money is in the ISA you can't take it out?
    I'll have a browse of the different ones, not sure where the best rates are at the moment.
    Originally posted by rocketsauce

    I'm with Santander and you can take it out at any point.


    Obviously you lose your bonus etc.
    Suvery Earnings 2016 - £188
    • shoaibs48
    • By shoaibs48 24th Sep 16, 4:25 PM
    • 8 Posts
    • 1 Thanks
    shoaibs48
    Hi,
    Thanks for all your help.
    Am I right in thinking that once the money is in the ISA you can't take it out?
    I'll have a browse of the different ones, not sure where the best rates are at the moment.
    Originally posted by rocketsauce
    You can take the money out anytime but you can't pay more then £200 a month into the account except the first month when you can put £1000 deposit and £200 for that month.

    barclays 2.27% seems the best rate available online. There are others but aren't available online
    • rocketsauce
    • By rocketsauce 25th Sep 16, 5:25 PM
    • 8 Posts
    • 0 Thanks
    rocketsauce
    Thanks.
    Say I had £500 in the ISA and wanted to take £100 out, would I just lose that percentage of the bonus? What if I put more in later on, would I still get the bonus?
    Sorry, not very clued up on this!
    • eskbanker
    • By eskbanker 26th Sep 16, 12:03 AM
    • 3,413 Posts
    • 3,026 Thanks
    eskbanker
    Say I had £500 in the ISA and wanted to take £100 out, would I just lose that percentage of the bonus? What if I put more in later on, would I still get the bonus?
    Originally posted by rocketsauce
    The bonus is paid out at 25% of whatever is in the ISA when you purchase, subject to the £3K cap (i.e. on a £12K pot), regardless of how many months/years it took to get there or how many withdrawals were made along the way.
    • rocketsauce
    • By rocketsauce 26th Sep 16, 10:23 AM
    • 8 Posts
    • 0 Thanks
    rocketsauce
    Thanks that's helpful. I'll start looking for the best rates!
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