Help to Buy ISA query

ThePants999

G_M wrote: »

At Exchange you pay 10%

G_M. you have a bit of a habit of providing both the technically correct information and the practically correct information, but not always highlighting which is which :-) Your explanations in this thread would have been much more useful if you'd made clear what kingstreet said above, i.e. that while 10% is the norm, those with >90% mortgages typically get agreement that the exchange deposit will match their mortgage deposit, rather than magically fund the difference.

Elfbert

stardust09 wrote: »

I want to maximise the bonus by contributing to my HTB ISA up to the last minute. Does anyone know how long it takes to close the ISA in branch (I'm with Halifax) and get the statement that the solicitor needs? I wasn't sure if you could just go into the branch and they do it there and then and give you the statement you need or if it takes time.

My partner had a Halifax HTB ISA. We walked into a random branch one Saturday morning, as we approached exchange. The woman on the front desk took his ID, found the ISA on their system, took his bank card for the account he wanted the savings part of the ISA paid into, printed everything off (a copy of the closure statement for us, and some paperwork to post to our solicitor) and within ten mins the savings money was in his other account, the ISA was flagged as closed and the paperwork was in the post to our solicitor. It was incredibly easy! Easier than we could ever have hoped, tbh.

I have heard other banks make it a bit more complex!

lauren_hb

Sorry to bring this up again but just trying to get it straight in my head...so home exchange deposit in 10% then mortgage deposit is 90%.

So for example..
Purchase price of house £180,000
HTB ISA - £3000 (bonus £1000)
Our deposit/cash - £45,000

So home exchange deposit would be £18,000
Mortgage deposit would be ???

This is where i get confused!

So what can the £3000 in my ISA be used towards? The £3000 i refer to above is totally separate from the £45,000 i refer to. I'm aware the £1000 bonus only comes at completion so can be used towards fees?

nodtomc

90% mortgage deposit but you don't have that. Not sure what you mean by this.

The £3000 can be used for your mortgage deposit , 48k total then. There's no need to treat it as separate. It is only the bonus which cannot be accessed before completing

lauren_hb

nodtomc wrote: »

90% mortgage deposit but you don't have that. Not sure what you mean by this.

The £3000 can be used for your mortgage deposit , 48k total then. There's no need to treat it as separate. It is only the bonus which cannot be accessed before completing

I mean as G_M explains above, there's essentially two instalments the 10% then the remaining 90%.
Or we just stick to the £45k and have the £3000 put aside for furnishing, any work that needs doing etc?

nodtomc

10% on exchange , 18000. You'll hand over the rest of your £45000 for your mortgage deposit for completion . That £3000 can be used for anything you like. Your solicitor will make this very clear for you

lauren_hb

nodtomc wrote: »

10% on exchange , 18000. You'll hand over the rest of your £45000 for your mortgage deposit for completion . That £3000 can be used for anything you like. Your solicitor will make this very clear for you

Excellent, thanks very much feeling clearer now!

clur84

I am really sorry but I am still completely confused despite reading this thread and anything else I can find. Can anyone work out what happens based on my numbers

House Price: £107,167
Deposit in help to buy isa: £8583
Deposit saved in another account: £2134
Total = £10717 so full 10% needed

Solicitor fees: £1000

Bonus expected: £2145 - where does this go?

Mortgage will be for £96, 450

surely if it goes towards final balance we need a smaller mortgage?

Sorry if I am being stupid but I just can't work it out or work out what to do for the best?

nodtomc

You hand over 11717 to your solicitor before completion. Your bonus is awarded on completion. Any extra money that's left over will come back to you. If you already have your deposit and fee covered, your bank balance will be £2145 better off

kingstreet

clur84 wrote: »

I am really sorry but I am still completely confused despite reading this thread and anything else I can find. Can anyone work out what happens based on my numbers

House Price: £107,167
Deposit in help to buy isa: £8583
Deposit saved in another account: £2134
Total = £10717 so full 10% needed

Solicitor fees: £1000

Bonus expected: £2145 - where does this go?

Mortgage will be for £96, 450

surely if it goes towards final balance we need a smaller mortgage?

Sorry if I am being stupid but I just can't work it out or work out what to do for the best?

It really isn't that difficult. Have you asked your solicitor for a draft completion statement so it's laid out in black and white?

You have to hand over 10% of the purchase price for exchange of contracts.

That's £10,717.

Your solicitor then requires £107,167 - £10,717 + £96,450 for completion.

Effectively, all that's left for you to pay is the £1,000 fees. However, your ISA bonus is going to be added to the pool of purchase funds, so instead of paying your solicitor £1,000 he is going to give you back £1,145.

That's £2,145 - £1,000 = £1,145.

You are putting in that £1,145 earlier in the process to meet exchange of contracts amount needed and getting it back later.