Help to Buy ISA Question- 10% deposit

Mike_88

Hi all,

I have a 10% deposit for a house that I have had an offer accepted on. The deposit includes £2000 from my help to buy ISA (£1600 + £400 government bonus). I understand that you cannot use this
money on exchange, but only completion. Is this correct? The whole savings amount or just the bonus?

Also I am aware that 10% will be required at exchange, is there anyway around this as without my help to buy savings I would only have 8.4%

I am a first time buyer so it's all new to me so any advice would be greatly appreciated.

Thanks!

markbmcfc

I asked the same question on the Mortgage forum, had some replies but i'm still none the wiser.

However, in your case, you can use the money you have saved at Exchange, you just can't use the bonus. So, for you, you only need to make up the £400, and can use your £1600.

Im 99% sure that's right, I've just no idea when you're supposed to use your bonus if you have to pay your deposit at exchange.

kittyjo82

I've had the same confusion also.

Solicitors have come back to say they can offer a reduced deposit but it's down to the sellers solicitors really to say whether they'd accept that or not.

Apparently it's not an unusual request.

I think the whole help to buy ISA thing is lacking explanation on this part of the process as it's general knowlesdge (in my opinion) that people assume you can use your help to buy isa for your deposit. And that means all of it. Doesn't make sense why you shouldn't be able to use it at exchange.
It's obviously a problem with the HMRC but if there's no going back at exchange of contracts I don't seem why they aren't happy to release the bonus then so funds are clear and deposits paid in full as expected.

I hope the sellers side accept our reduced deposit. Otherwise we have to find an extra £900 and then we don't know if we'd get that back once the bonus IS claimed for at completion. Otherwise it seems a bit pointless!