Help to Buy ISA(Time frames, has anyone used it yet?)

Strebor123

Hi,

Very close to completion for our purchase of our first house. I have just sent off the request to close down my help to buy and get the closing statement to issue to my conveyancer but I have a couple of questions.

An MSE article states this "However, you can only use the bonus for your mortgage deposit, not your home deposit. What this means in practice is that the Government bonus can't be used toward the deposit you pay to the seller when you exchange contracts, it can only be used at completion (see Buying a Home - the Timeline to learn about the difference)."

I went on that timeline article and I can't see any mention of it? Does this mean we are going to need to initially front the full deposit without the bonus money from the help to buy? I don't really understand it. I thought the point was that it helped you with the deposit.

Second. My solicitor has stated 15 working days between exchange and completion in order to make sure the bonus money comes through. I have read the Conveyancer guidelines on the help to buy and it only requires 5 working days. Has anybody actually claimed the bonus yet? How long did it take to come through? I feel like 15 working days is a very excessive amount of time and it's going to push us past our preferred date for completion with the seller. If it does indeed only take 5 working days I am going to be pushing quite strongly for my solicitor to revise their timescales.

Thanks in advance for the help.

MrJB

What you need to do is get the exchange monies altered to take into account that you're paying the balance with help to buy. EG you're paying £15k deposit, this becomes £14k on deposit and your 1k help to buy bonus is paid as part of completion.

I cannot help with your second question - but I guess they maybe basing their time frame on experiences.

Strebor123

This will be my solicitor's first help to buy ISA request. 15 working days just seems to be an excessive arbitrary figure.

Thanks for your answer to my first part.

marksoton

Strebor123 wrote: »

This will be my solicitor's first help to buy ISA request. 15 working days just seems to be an excessive arbitrary figure.

Your solicitor is doing this to protect both you and themselves.

HMRC tell me my call will be answered in x time. It's normally in Z time. I wouldn't want to miss my completion date ( and the associated costs ) based on government guidance.

Strebor123

Hi all,

Just thought I would update as it might be useful for anybody else. From doing my own research you DON'T need to even wait until exchange to apply for the bonus. After I informed my solicitor of this they applied for it after getting us to sign the ISA declaration form and the money was paid into their client account the next day!

So 15 working days was a load of rubbish after all! I'm not saying they will all be this quick but being able to apply before you exchange can take away any problems you might have had with regards to not getting the funds on time.

Blue_Cardinal

Just to add to this, there is a £50 charge to get the money out of the ISA. I'm guessing like us, most FTB couples have two to double the bonus, so that's £100 extra to account for.

Not a massive deal compared to the price of a house overall, but thought it'd let people know - as it was something I wasn't aware of!

Ayslynne

We have recently closed our help to buy ISAs and our solicitor received the bonus money about 3 days after he uploaded our first time buyer declaration form that we had to sign.

Strebor123

We must have got lucky then as we were only charged £50 (+VAT) for both of our ISA's.

rtho782

Just done this, charged £50+Vat for both isas.

It takes 3 working days for nationwide to close the account, the guidance gives them 7 working days to produce the statement, and it takes 5 working days for the HtB ISA people to process the bonus.

Your vendors will probably want you to put the full 5%/10% deposit down at exchange, and the bonus is not paid until completion, so you will need to have the extra money and get it back later. (if you are doing a £10k deposit, don't assume you can put down £4k from HtB ISAs, £5k from other savings, and the £1k bonus will make up the rest, you'll likely need to put down the full £10k now and the £1k bonus will come off your final bill with fees etc.)

In our case, the bonus now looks like it will come through after completion and get paid back to us.

The way the scheme is set up is idiotic in this regard. The ISAs are basically paying half our stamp duty.