Help to buy ISA house deposit

vicky2791

I'm wondering if anyone knows about using the help to buy ISA for a mortgage deposit.
We have got a mortgage in principle for up to £180000 with a 5% deposit and I love a house on the market for £155000. We have £7000 in our ISA which alone is a little short but with the bonus it would be £8400. Which would be perfect! But can I include that or not on a 5% because it's not clear?
Thanks I just don't want to get our hopes up if it's not possible.

aries_163

So yes you can use the bonus amount to contribute to the mortgage deposit.
However you won’t have the bonus at exchange.
When you buy a house you commit to pay a certain % at exchange of contracts. Usually it is 10% but you would need to let your conveyancer know you would need to exchange with less. They would present this to your sellers conveyancer and ask for approval.
No monies actually get to the seller on exchange but your conveyancer would need to be holding your funds in their account before exchange can happen. Then if for some reason you pulled out post exchange you are committed to pay this deposit amount to the seller.
If you have less than the typical 10% available to pay to your conveyancer at exchange, you need to tell them this upfront so they can negotiate this with the sellers conveyancer.

vicky2791

Thank you!
What is the downside for the seller accepting a lower exchange deposit? Why would they turn me down?
Im all new to this so I don't really understand.

CarrieVS

vicky2791 wrote: »

Thank you!
What is the downside for the seller accepting a lower exchange deposit? Why would they turn me down?
I'm all new to this so I don't really understand.

The exchange deposit is the least amount of money they're guaranteed to get if you pull out post-exchange.

After exchanging contracts you're legally bound to go through with the purchase, but if for some reason you couldn't or wouldn't they will at least get the exchange deposit because that will have been paid over to your solicitor already.

So, if they accept less then if you fail to complete the purchase they end up with less money. Though they can still claim damages as well as keeping the house and selling it to someone else.

More info about exchange of contracts

vicky2791

Aww thank you so much.
That makes sense to me now, that website it great!