Help to Buy ISA query

G_M

bambamboo wrote: »

* .... HTB ISAs which will bring in a £1.5k bonus.

* getting a 95% mortgage

* utilising the £6k + other savings as the deposit

The mortgage that we're applying for is £150000 but would we technically only have to borrow £148500?

*purchase price: £158000K

1) at Exchange ou pay a 10% purchase deposit of £15,800. This will come from your savings or a loan
2) at Completion you will therefore owe another £142,200 + SDLT & fees
3) At Completion you will receive £150000 + £6000 = £156,000.
4) so you'll have £13,800 to cover your SDLT, fees, other expenses and to repay your deposit loan if any.

bambamboo

Sorry, that doesn't really help clear things up.

We don't have a 10% deposit. Are you saying that we can't use the £6k in our ISA as part of our deposit cause that's what we're planning on doing plus topping it up from other savings to make the 5% (£8k). We've then put money aside for fees but not £15.8k and not without using the £6k ISA money.

Zeni

kingstreet wrote: »

It's really not that difficult.

Over the purchase period, various sums are going to come in to your solicitor;-

your ISA investment/deposit
your mortgage funds
your ISA bonus
your payment for fees, stamp duty etc.

It's all going in to the overall pool of purchase monies.

At various times, payments are going to go out. To the vendor's solicitor, to HMRC, for searches, to the solicitor for fees and so on.

Everything is accounted for on your completion statement. It doesn't really matter about what a particular payment coming in is used for, as long as the end result is a £0 balance.

If the solicitor will have a surplus at the end, it will be returned to you. If he knows he will have a surplus, the amount requested from you to balance the account may well be reduced, so you actually hand over less in the first place.

Finally a clear explanation!

kingstreet

bambamboo wrote: »

Are you saying that we can't use the £6k in our ISA as part of our deposit

No, we're saying you won't have the ISA BONUS ahead of exchange of contracts to use it as part of that deposit.

So you need to make that bit up until completion.

When it comes in, it will simply drop into the pool of purchase monies to be defrayed in the usual way for purchase expenses. If you've used money you set aside for fees, it will simply replace that money...

bambamboo

No, that's fine. We knew the bonus couldn't be included and we'd never factored that into the bonus amount. I was just confused about step 3 about where the post says about £6k at completion.

We got our ISAs with Santander when the interest rate was 4%, so assuming that we can add that to the deposit as well (I know it won't be much bit every little helps! )

bambamboo

Sorry meant to say deposit amount (not bonus), won't let me edit the post for some reason

G_M

bambamboo wrote: »

Sorry, that doesn't really help clear things up.

We don't have a 10% deposit. Are you saying that we can't use the £6k in our ISA as part of our deposit cause that's what we're planning on doing plus topping it up from other savings to make the 5% (£8k). We've then put money aside for fees but not £15.8k and not without using the £6k ISA money.

Unless your seller agrees to a reduced deposit payment at Exchange, you will need to pay 10% at that point. And your ISA bonus will not be available at that point.

10% is the norm.

Do not confuse the purchase deposit payable at Exchange (10%), with the 'mortgage' deposit (in your case 5%).

bambamboo

Yeah, I know that the ISA bonus won't be available until completion, I've never factored that into any deposit amounts.

I'm not aware of 2 deposits required, I don't understand the difference between them.

We don't have 10% that's why we've gone with a 95% mortgage, but I've read that having 5% isn't usually bad. I don't know what the other deposit is. We have £8k + money for fees. That's it.

bambamboo

This all seems too confusing, I don't understand all the process and I've read so many articles about house buying I don't think there's any left to read.

Might just stick to renting. Easier

Dawnue1985

We have a 5% deposit...All we have to do is send statements to solicitor let them to the rest itwps what they get paid for! As long as you have your deposit let everything happen...Nationwide has simplified everythibg...Even I understand everything.