Homebuyers ISA - definition of Mortgage

vegit8

Hi
My son has been paying into a Halifax Homebuyers ISA since the beginning and now has £2.2k in it.
He has found a shared equity property that he wants to buy.
As he is a professional musician his earnings are so irregular that he would be seen as a bad risk by a Bank or B/Society and would not get a loan.

We are going to lend him the purchase price, and this will be secured by a legally binding loan agreement and a charge on the property.

Now... to qualify for the 25% bonus on his Homebuyers ISA one of the stipulations is that the property has to be purchased with a mortgage.

Does our loan agreement and charge equate to a mortgage?
The definition of a mortgage that I have found says (broadly) ... A loan secured against a property TYPICALLY provided by a bank or financial institution.

Any thoughts?

Thanks

AndyT678

I think you might have a chance...

https://www.helptobuy.gov.uk/documents/2015/12/scheme-rules.pdf

"the acquisition is to be funded by a loan that will be secured by a
charge by way of legal mortgage over the land;"

"the Eligible Conveyancer is satisfied that:
(b) the purchase of that Eligible Interest in Land will be funded by a
loan, which will be secured by a legal mortgage against that
interest in land;"

" a legal mortgage as defined in
section 205(1)(xvi) of the Law of Property Act 1925;" (England & Wales)

which says

(xvi)“Mortgage” includes any charge or lien on any property for securing money or money’s worth; “legal mortgage” means a mortgage by demise or subdemise or a charge by way of legal mortgage and “legal mortgagee” has a corresponding meaning; “mortgage money” means money or money’s worth secured by a mortgage; “mortgagor” includes any person from time to time deriving title under the original mortgagor or entitled to redeem a mortgage according to his estate interest or right in the mortgaged property; “mortgagee” includes a chargee by way of legal mortgage and any person from time to time deriving title under the original mortgagee; and “mortgagee in possession” is, for the purposes of this Act, a mortgagee who, in right of the mortgage, has entered into and is in possession of the mortgaged property; and “right of redemption” includes an option to repurchase only if the option in effect creates a right of redemption;

There's nothing that says to me that the mortgage needs to be provided by a specific type of institution but you'd need to get clarification from the conveyancer. You definitely need them to agree.

vegit8

Hi - Thats excellent.
The Conveyancer, did say that as this was such a new scheme he had not come across our issue before.
I can send this to him - thank you.