Deposit using help to buy isa

davidmorton89

Hi everyone 👋

Me and my girlfriend are saving for our first home. We both have a help to buy isa with £6k in each.

As I understand it, this means we can join them and put £12k toward our deposit, then the government will give us a 25% bonus on that amount. This means in total we will have £15k altogether.

We live in the North East, so house prices are pretty cheap. We are looking at a budget of around £150k, so £15k would be ideal as we would have a 90% LTV.

My question is...

When I'm looking for a mortgage and put in the deposit amount, do I put in £12k (the actual money we have) or the £15k (the money we will have with the government bonus)?

If it's £12k then we will have a larger LTV percentage and will probably miss out on the better deals. If that's the case then we could save for another 6 month.

If it's the £15k, then we could be ready to go soon

Thanks in advance.

David

kingstreet

You will have £15,000 for completion.

Exodi

You would have £12,000 available for the exchange deposit and the bonus £3,000 available for the mortgage deposit - again, The Help To Buy BONUS money can only be used for the mortgage deposit and NOT the exchange deposit.

Hope that clears things up.

davidmorton89

Ok, that's great. Thanks for the reply.

I'll need to read up on the difference between these then.

To tell a newbie/idiot like me out, if I'm doing a search on a comparison site to just get an idea of payments and deals - do I put £12k or £15k as a deposit.

If I have understood correctly, I would say £15k but need some clarification.

Thanks again, appreciate the help.

davidmorton89

*To help a newbie/idiot like me out

Exodi

To answer your question, £15k as a deposit - both the ones I mention still go towards the house, they're just paid at different times!

Whilst you are starting to work out finances, make sure you're also aware you'll need some money for fee's (Valuation, Surveyor, Solicitor/Conveyancer, Local Searches, Product Fee's). I would just keep in mind you'll need £2,000-£3,000 to the side to cover this.

davidmorton89

Ah ok, I get you now. Thanks for being patient and for the help.

Yes, we are aiming to have another £4k set aside at least.

Hopefully we could even get to £6k to have some spare for moving in essentials.

Thanks again!