Help to buy isa wanting to do a 5% deposit

SparkleFtb

We are having a 95% mortgage on a property for 195000.

We have help to buy isa with a £1000 bonus, the rest of the savings is in our current account.

From what I have read I believe that we won't get the bonus till completion.

I'm just wondering what we will have to pay on exchange... will we be able to pay £8750 or will it have to be the £9750

And if it is the latter will the deposit mess with our mortgage offer as the deposit will change ?

I keep getting conflicting info an recently a broker said we could use it to pay our stamp duty?

ruperts

My understanding is that you can't use the bonus for the deposit so you'll have to fund the shortfall yourself.

Best person to ask would be your solicitor as they'll be in charge of moving the money around.

p00hsticks

SparkleFtb wrote: »

I'm just wondering what we will have to pay on exchange... will we be able to pay £8750 or will it have to be the £9750

The deposit payable on exchange isn't really anything to do with the deposit your are paying towards your mortgage - it's a sum of money that the purchaser puts down at the point of exchange (when the contract to buy becomes legally binding).

Conventially it's 10% of the purchase price - you need to speak to your solicitor to say what you can afford and ask if he can get the vendors to accept a lower amount (they often do).

Otherwise you could consider exchanging and completing on the same day, as that would remove the need for a separate deposit on exchange.

vapourA

Our position was the same. We had to fund the 5% deposit ourselves at exchange and hen the solicitor claimed the bonus. On completion the solicitor ties all the remaining costs in a statement, legal fees, stamp duty etc and the ISA bonus was in the statement effectively refunding us the money we stumped up at exchange so we could then use the funds towards the final bills.

There have be a few threads about this and others have found theirs worked the same.

SparkleFtb

That's great thank you,

We have the money to do the full 5% on the exchange day as we have saved for the solicitors fees etc I was just a bit concerned that we would somehow miss out on using the cash bonus of the isa. I didn't realise they were two different things! We would be happy to exchange an complete on the same day I just don't know the ins an outs of how it all works as we have never done it before.

Zeni

SparkleFtb wrote: »

That's great thank you,

We have the money to do the full 5% on the exchange day as we have saved for the solicitors fees etc I was just a bit concerned that we would somehow miss out on using the cash bonus of the isa. I didn't realise they were two different things! We would be happy to exchange an complete on the same day I just don't know the ins an outs of how it all works as we have never done it before.

The only thing to be careful is that you (well your solicitor) applies for the bonus only once you have exchanged and they say to allow at least 5-7 days between exchange and completion to allow them to apply for this on your behalf. (You can exchange and complete on the same day if needed you just have to use an expedited process)

I'd say have a read of these https://www.helptobuy.gov.uk/help-to-buy-isa/faq/ as they've helped us alot!