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Help to buy ISA Question! Help please 😊

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Hello 😊
We are about to embark on the process of buying a house, and have stumbled across the 'help to buy ISA' when doing research, basically we are being gifted a 5k deposit from family members, and all they have asked for in return is for us to save 3k+ for any fees and decorating etc! (They want to put the deposit down on the house though)

So anyway if we open a help to buy ISA between me and my girlfriend, and both save £1600 over 3 months, we qualify for the £400 bonus each, which goes towards completion which is fine, but can we withdraw the £1600 we have both saved when we get a offered accepted and keep that aside for fees/decorating, and let her family put the deposit down on the house with 5k (5% deposit) and still qualify for the bonus?

Thank you for your help in advance, and sorry if I made that to long winded 😊

Comments

  • morning

    there are two types of ISA - the lifetime ISA and the help to buy. the help to buy you can only save £200 a month max, each. the lifetime one is £4000 a year, each... i believe you cna open the help to buy isa with an initial deposit of £1200. The bonus cannot be used for the deposit due at the exchange of contracts, to pay for solicitor’s, estate agent’s fees or any other indirect costs associated with buying a home. best to look a bit deeper into your options

    lets say you save the £1600, totalling 4k when ready to use, you could use the "gifted" monies for the fees/decorating... surely will be neither hear nor there with the relatives?

    this may be useful for you...
    https://blog.moneysavingexpert.com/2016/04/the-help-to-buy-isa-v-lifetime-isa-which-should-first-time-buyers-get/
  • Baozhai
    Baozhai Posts: 11 Forumite
    Thanks OP, I was too making a decision on buying a new house and this thread gave me a new direction.
  • Hey, thanks for reply

    I get what you are saying about it being neither here or there, but we would rather keep the money separate, as they want to put the deposit down, wouldn't like to ask them to hand over the cash for decorating instead

    P.s it's my girlfriend's family thats gifting us, not mine😊
  • Cart3rlfc wrote: »
    can we withdraw the £1600 we have both saved when we get a offered accepted and keep that aside for fees/decorating
    Remember to not just withdraw what you've saved from the HTB ISA, go to the bank and close the isa (obtaining the closing statement) otherwise you won't get the bonus.
  • I bought back in June using the Help to Buy ISA. When you are nearing time of exchange you close your H2B ISA account in the bank and they will transfer the money you have actually saved (e.g £1600) to the account you tell them to and then give you a closing account statement. You send this statement to your solicitor's and they will apply for the bonus on your behalf. From what I've read online it varies by solicitor, some have the bonus taken off the completion statement (this is how ours worked), some off the mortgage, some off the fees.... etc etc.......

    But essentially your H2B ISA savings will eventually end up in a big pot of money that you send to the solicitor's and then they will divy it up for lack of a better term, so your money and your gifted deposit will likely end up in one big pot which the solicitor will add any bonus you have (i.e £400) and then all of that will be split out as per your solicitor if that makes sense... All you'll get is a completion statement itemising deposit, bonus received, disbursements, H2B ISA fee (usually £50 per ISA), solicitor fee etc etc. and a final figure of whether you owe anymore to the solicitor or if THEY owe you (if you sent too much to start with)
    Bought First Home - June 2018 Starting £218,500 June 2020 £203,800.95 :T MFW 2020 #78 - Target £3000 - So far... £2182/£3000
    Ultimate Goal MFW by 40! - 2033
  • Thanks for the replies again! Yea that sounds brill, thanks
  • Can I keep the money from the ISA we have saved separate and just used the gift deposit, for our deposit and just pay the fees after? Or does all of the money from the ISA need to go the solicitor? Thanks
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