Help to Buy ISA closing

Justkillme88

Hello, together with my partner we have 18,000 on our
two help to buy isa accounts,We need deposit of £15,000 to buy a house. can we close both ISA's ? If we close them, the goverment bonus will be credited from the entire amount of £ 18,000 or only from 15,000? and what happens with the remaining £ 3,000? Thanks for suggestions

DiggerUK

This will tell you..._

https://www.moneysavingexpert.com/savings/help-to-buy-ISA/

masonic

You shouldn't close them until your solicitor or conveyancer is ready to submit a bonus claim (because if the purchase falls through and a claim was not yet submitted, you'd lose the ability to reinstate your ISAs). The maximum bonus that can be claimed on behalf of each of you is £3000 and it will depend solely on the closing balance of your account. All of the bonus money must be used towards the mortgage deposit. There is no requirement to use the whole closing balance of your HTB ISAs.

Justkillme88

Woman in bank told me that we should take some money out from our ISA's (3000£), becouse we have to much funds there. She told me also that we can claim bonus only from amount of deposit we need ,which is £15000. Is that true? She doesn't seem sure.

KatrinaWaves

Justkillme88 wrote: »

Woman in bank told me that we should take some money out from our ISA's (3000£), becouse we have to much funds there. She told me also that we can claim bonus only from amount of deposit we need ,which is £15000. Is that true? She doesn't seem sure.

You can only claim the govt bonus on money you use towards buying your house. So if you use £15k for that money to buy a house, you can only claim the bonus on that money.

You can take whatever money out you want without penalty, but you wont get the govt bonus on random withdrawals.

DCFC79

Justkillme88 wrote: »

Woman in bank told me that we should take some money out from our ISA's (3000£), becouse we have to much funds there. She told me also that we can claim bonus only from amount of deposit we need ,which is £15000. Is that true? She doesn't seem sure.

Have you got a solicitor to do the conveyancing etc ?

My solicitor has asked me to not close it yet but to do so 3/4 weeks before completion, she will let me know when completion is due.

Justkillme88

Yes I have got but she's on holiday right now, I will ask her when she's back when I should close my isa. thanks for all responses!

masonic

Justkillme88 wrote: »

Woman in bank told me that we should take some money out from our ISA's (3000£), becouse we have to much funds there.

That is bad advice. Even if the balance of each ISA is above £12,000 (£24,000 in total), you will probably be benefiting from a higher interest rate than you can achieve elsewhere. If each ISA only contains £7,500, then you'd also be sacrificing £750 of potential bonus money by doing as she suggests.

In your situation, you can expect to receive a bonus of £4,500. All of that must be used towards the mortgage deposit of £15,000 (which it can be). The rest of the mortgage deposit (£10,500) can come from anywhere you like but would usually be funded from the closing balance of the HTB ISAs.

She told me also that we can claim bonus only from amount of deposit we need ,which is £15000. Is that true? She doesn't seem sure.

That is correct. The whole of the bonus must be used towards the mortgage deposit, so if you need a £15,000 deposit, any bonus money you receive above that £15,000 would need to be paid back to the Government. In practice the maximum bonus you could receive is £6,000 (for 2 people) if your ISAs were valued at £24,000 or more. So you can't claim a bonus as high as £15,000 and this is rather irrelevant to you. If it were an issue, it's easily fixed by getting a smaller mortgage.

Remember the golden rule: Banks are clueless about ISAs, always verify anything they tell you.