Help to Buy ISA Bonus Question.

jackclark3

Hello, I’ve been struggling to find an answer to my query, having found conflicting information on the internet. My partner and I have bought a house at £129,000. Together We have saved up a total of £20,000 in a help to buy ISA. We are taking out a mortgage and have only accounted for that £20,000 so will be borrowing £109,000. However we have an extra £5000 from the help
To buy ISA Bonus (£25,000 altogether).

Should we have included this extra £5000 when applying for our mortgage?

The reason that we didn’t is because we assumed that because you don’t receive the bonus until completion so thought that it couldn’t be taken into account as part of the deposit. We now think that we should have done, meaning that we could possibly be lending more than we need to? Of course if possible we would like to borrow less as it seems pointless getting this bonus only to be paying more in interest anyway due to borrowing more than necessary.

I hope I’ve worded this okay, my apologies if it sounds confusing. Apologies also if I’ve posted in the wrong forum: this is my first post so thank you for any of advice on this matter in advanced.

Best Wishes,

Jack.

kingstreet

Your total deposit is £25,000 so your mortgage should be £104,000.

You will hand over £12,900 (10%) ahead of exchange of contracts to your solicitor.

Ahead of completion, you will hand over the remaining £7,100 and your solicitor will obtain the £5,000 bonus funds to make up the £25,000 total.

Presumably you aren't using a mortgage broker?

jackclark3

Hi Kingstreet.

Thank you for your reply and for clarifying this for me. That’s much appreciated. We are using broker/advisor however he is currently out of the office hence my referring to this forum for advice. Will sort ASAP.



Best Wishes,

Jack.