Help to buy isa bonus towards deposit

rachd

Hi,

I am a first time buyer with a help to buy isa.

I have had an offer accepted on a house pending my decision in principle being approved which has been referred to the underwriters at nationwide. So currently have everything crossed!
The property is £124k. I will be paying a 12.5% deposit. So my understanding would be 10% deposit at exchange and the remaining 2.5% at completion which I am hoping my help to buy bonus will be through in time to contribute to this to free up some of my savings. I believe I have to let the solicitor know of my wishes to use my bonus towards the deposit.
It’s taken quite a while for me to get my head around this help to buy bonus and have asked many questions with various answers. Just wondering if anyone has experience of using their help to buy bonus towards their deposit? Also, the person doing my decision in principle told me that her sons htb bonus wasn’t through in time and was used to pay solicitors fees and the difference was then paid into his bank account.
Thanks.

kingstreet

That all seems pretty accurate.

It'll work itself out with the help of your solicitor. The shorter the period between exchange and completion the less chance there is for the bonus to have come through.

SeaVixen

Hi Rachd,

The person doing your decision in principle was right - your HtB bonus won't be through in time to be part of your deposit. It will only come through after completion, so can be used for decorating or solicitors fees.

Your solicitors will also charge about £50 so that your deposit can be claimed, so factor that in as well

Good luck!

rachd

SeaVixen wrote: »

It will only come through after completion, so can be used for decorating or solicitors fees.

Thanks for your reply. This is a little confusing as I’ve read that the bonus can’t be used towards fees etc?

kingstreet

rachd wrote: »

Thanks for your reply. This is a little confusing as I’ve read that the bonus can’t be used towards fees etc?

The rules say it can't but in practical terms it is; as it goes into the pool of funds held by the solicitor.

rachd

Thank you. Just hoping my DIP gets passed. It appears I was right on the cusp due to my age (46), the length of the mortgage (23 1/2 years) and borrowing my maximum. The person doing my DIP couldn't see anything wrong and that they want to view bank statements. I’m a little anxious about the outcome.

whatdoyouthink...

rachd wrote: »

I believe I have to let the solicitor know of my wishes to use my bonus towards the deposit.

Have you been to the bank to close the ISA and given the closing statement to your solicitor? The sooner you get this done the more chance you have of getting the bonus through before completion.

diggingdude

No point closing your ISA until you are close to exchange. Keep putting money in and increasing your bonus

katieort

Don't know about other people and why they are saying it can't be used for the deposit, as that's the point of it! I just bought my first house last month and used the help to buy deposit. I closed the account at the bank about 10 days before completion (i exchanged and completed same day) I sent the letter that it had been closed to my solicitor and they then requested the bonus from the government. It was really easy and didn't really have to do anything other than tell my solicitor that i was using h2b at pretty much the beginning of the process and then close my account and send proof to solicitors when it came to exchange/complete. My bonus was also part of my deposit, I had a 10% deposit, about 8% was my savings and the 2% was the bonus (or thereabouts). So as long as you close the account with enough time for you solicitor to request the bonus you are fine to use as part of the deposit.

bopsybunny

In our case we intended to use the bonuses towards our mortgage deposit, but as it takes time for the funds to be released the solicitor asked if we could pay him the value of the bonuses (~£2200) upfront towards the deposit along with our other (10%) deposit funds (he'd seen our bank statements so knew it was possible for us). He said there can be a delay and as we had a short time between exchange and completion, this would make things easier. Soon after we moved in we each received a cheque from the solicitor to the value of our bonuses.

Takmon

SeaVixen wrote: »

Hi Rachd,

The person doing your decision in principle was right - your HtB bonus won't be through in time to be part of your deposit. It will only come through after completion, so can be used for decorating or solicitors fees.

Your solicitors will also charge about £50 so that your deposit can be claimed, so factor that in as well

Good luck!

That is wrong. The bonus can be applied for any time before exchange and there is even a fast track claim route for the solicitor where it only takes a few days to come through.

So the only reason it would come through after completion is if the claim is made too late so this should rarely happen because most of the time solicitors know when it is likely the exchange will happen soon.