ADVICE PLEASE - Help To Buy ISA Bonus

JP95

Hello, so me and my partner have recently reserved a new build home.

I have done lots of research on the help to buy schemes and understand the bonus can only be used upon completion but i am still confused. All info online states that the bonus can only be used towards the purchase price.

We are using the Help to Buy equity loan so at the minute it is set up like this. 20% equity loan set up and in place, 75% mortgage offer received and set up. exchange will be happening shortly and have a ageed a lower amount with the builder so we can still pay into our isa's... great!

However, between us both we will have £5k in there which is more than the actual 5% deposit! My solicitors say they will claim the full 25% bonus on this and then any money left over the 5% will be paid back into my bank (ive worked it out they will pay me back about £8,750 after the deposit)

Does this sound right??
So i am actually receiving 25% bonus on money in there that isn't getting used as the deposit....

Even if it's classed as all the "bonus portion" is getting used towards the deposit it means only 60% of my money is actually going towards the deposit.

I do hope that makes sense to everyone - I am rubbish at describing things. Just want to know if this seems right and that the solicitors are going to do what they say at the end of all this... don't want to be caught out.

Thanks,

J

masonic

JP95 wrote: »

My solicitors say they will claim the full 25% bonus on this and then any money left over the 5% will be paid back into my bank (ive worked it out they will pay me back about £8,750 after the deposit)

That's awfully generous of them. The scheme rules state the bonus must be included with the funds consolidated at the completion of the property transaction. There is no explicit rule that the proceeds from the HTB ISA also form part of the consolidated funds. The solicitor will need to make a declaration that the whole HTB ISA bonus was used towards completion. If they are willing to do so and return any excess funds from the balance of your HTB ISA, then you are in a fortunate position and no explicit rules have been broken.

Usually, in this situation the excess funds would be used to reduce the size of the mortgage.