Help to Buy ISA guide

george4064

Chris98765 wrote: »

I don’t think there is a limit on the loan to value on the mortgage when using a Help to Buy (H2B) ISA from what I can see on the official govt website however Nationwide appear to only allow you to use a H2B ISA for mortgages with a loan to value (LTV) of 85% or more. This is going by their available mortgages on their mortgage calculator on their website.

Has anyone used an ISA for less than a 85% LTV mortgage with Nationwide or another mortgage provider?

Thanks
Chris

It must just be the case that Nationwide will only you offer a max 85% LTV, irrespective of you using the HTB ISA or not.

If you're talking about the HTB ISA bonus and you did really mean a lower LTV (i.e. 70% or 50%), then yes I have. I don't think there are any restrictions to use the HTB ISA other than you must be a first time buyer and the total property price is no more than £450k in London/£250k outside of London.

If in doubt, speak with your solicitor.

releasethehounds

I would like to open a Help to Buy ISA each for my two daughters. One is 20 so no problem but I notice that I have to open the ISAs before 1st November '19 and my younger daughter doesn't reach 16 until December! Is there any way I can still open the Help to Buy ISA for her?

eskbanker

releasethehounds wrote: »

I would like to open a Help to Buy ISA each for my two daughters. One is 20 so no problem but I notice that I have to open the ISAs before 1st November '19 and my younger daughter doesn't reach 16 until December! Is there any way I can still open the Help to Buy ISA for her?

The deadline is actually 30th November not 1st (see posts #1759 to #1763 above) but that's still not December, so if your younger daughter isn't 16 until after the deadline then she won't qualify for a HTB ISA I'm afraid. She could open a Lifetime ISA once she's 18 but would have to make do with a Junior ISA before that (or less appealing adult ones).

The elder one can open a HTB ISA if she does so by the deadline, but strictly speaking she needs to do it herself, i.e. you can't do it for her.

Chris98765

Thanks for your reply George. Good to know that you have used the ISA at less than 85% LTV.

With Nationwide you can view their products online and if you tick that you are using Help to Buy ISA then it doesn’t show mortgages below 85% LTV and asks you to call but if you state above 85% then it does show products so as you said seems to be a Nationwide policy. I will check with the solicitors to be sure. Many thanks.

Rich2808

Chris98765 wrote: »

Thanks for your reply George. Good to know that you have used the ISA at less than 85% LTV.

With Nationwide you can view their products online and if you tick that you are using Help to Buy ISA then it doesn’t show mortgages below 85% LTV and asks you to call but if you state above 85% then it does show products so as you said seems to be a Nationwide policy. I will check with the solicitors to be sure. Many thanks.

Nationwide also operates a save to buy isa - which gives an extra bonus of up to 1,000 pounds I believe if you take out certain types of mortgages with them which have high LTVs. Not sure if that is causing the confusion.

That is just a Nationwide product and has nothing to do with the help to buy isa.

Whether you take a 5% or a 95% LTV mortgage you are eligible for the government help to buy isa bonus - and it has nothing to do with the Nationwide as your solicitor claims it if you meet the other criteria. So you can apply for any NW mortgage - if you have a high enough deposit etc - and it will not affect your eligibility for the government bonus. You just need to buy a home with a mortgage.

MDMD

Rich2808 wrote: »

Nationwide also operates a save to buy isa - which gives an extra bonus of up to 1,000 pounds I believe if you take out certain types of mortgages with them which have high LTVs. Not sure if that is causing the confusion.

That is just a Nationwide product and has nothing to do with the help to buy isa.

Whether you take a 5% or a 95% LTV mortgage you are eligible for the government help to buy isa bonus - and it has nothing to do with the Nationwide as your solicitor claims it if you meet the other criteria. So you can apply for any NW mortgage - if you have a high enough deposit etc - and it will not affect your eligibility for the government bonus. You just need to buy a home with a mortgage.

You haven’t been able to apply for that account for some time. The issue 3 is a closed product.

Rich2808

MDMD wrote: »

You haven’t been able to apply for that account for some time. The issue 3 is a closed product.

Oh I agree its closed to new investors - but some people still have the account and can draw it down to fund an NW mortgage and get the bonus on top.

The point I was referencing is that when you search for first time buyer mortgages on the website it asks you to tick a box if you have a Nationwide save to buy isa or help to buy isa. If you tick that it will won't let you search for any mortgages with a loan to value below 85% - but instead asks you to telephone them instead.

While I can understand why this would be the case for their save to buy isa product bonus - as its limited to high LTV products - this is irrelevant for the help to buy isa product which has frankly nothing to do with applying for a Nationwide.mortgage range but is used to draw down a bonus the FTB claims separately via their solicitor on completion.. So essentially they are discouraging FTBs with larger deposits who have help to buy isas to apply for their products online which is very odd and insisting they call their call centre instead. Perhaps whoever set up the search didn't get the difference between a help to buy isa and their own save to buy isa product?

This is why the issue has arisen - because the NW have frankly made an error in designing their online mortgage search for FTBs using help to buy isas. who want LTV mortgages below 85%. They should not tick that box!

https://www.nationwide.co.uk/products/mortgages/first-time-buyers/mortgage-rates

NX1977

I'm on a joint mortgage following divorce, but and not financially responsible for paying this each month, and the house has been transferred into the other parties name as part of the divorce.

Does this still make me ineligible for this ISA?

eskbanker

NX1977 wrote: »

I'm on a joint mortgage following divorce, but and not financially responsible for paying this each month, and the house has been transferred into the other parties name as part of the divorce.

Does this still make me ineligible for this ISA?

The test is more about ownership, as in being named on title deeds, rather than inclusion on a mortgage, but realistically they normally go hand in hand - if you're suggesting that ownership was transferred from joint to sole on divorce then this would mean that as a previous owner you're no longer a first-time buyer and therefore ineligible for a HTB ISA.

masonic

NX1977 wrote: »

I'm on a joint mortgage following divorce, but and not financially responsible for paying this each month, and the house has been transferred into the other parties name as part of the divorce.

Does this still make me ineligible for this ISA?

Unless part of the divorce settlement involved someone going back in time and stopping you from ever having a share of the property then I'm afraid so.