Accessing deposits before applying for a mortgage.

rachell_guy

Hi there! I'm a first time buyer looking to use the help to buy equity loan scheme or the shared ownership scheme. My husband and I are trying to see if it's possible for us to buy somewhere to move into in July/August time. The only thing is, our deposit is sitting in a LISA and cannot be accessed until July 11th. Does this mean that I can't apply for a mortgage, or apply/reserve a house until it's available? My understanding was that the deposit was paid on the point of completion, and so I figured that with proof of the funds, we'd be able to progress as normal, as long as completion happened after the funds were available. I was speaking with a housing association today though who told me there'd be no point looking at houses until after the deposit is available. I'm very confused! Any advice would be greatly appreciated!

asm89

Proof of deposit is fine. So you can apply for a mortgage before July 11th.
But you'll need at least a 5% deposit for exchange which is usually 1 to 2 weeks before completion.

For new builds the developer normally expects you to exchange within 4 weeks of reserving the property, whether its built or now. So something to consider. 

It also takes up to 30 days for your LISA funds to get released to your solicitor. But you can apply up to 30 days before July 11th for the release. But you can usually put pressure on the LISA provider to release the funds within days. I got them to release mine in 3 working days last year. 

I'd look to reserve a property around mid June. It does normally take longer than 4 weeks to get to exchange but in case it's quick.

Nothing stopping you meeting with a mortgage broker in advance of this to weigh up your options for mortgages. 

rachell_guy

This is hugely helpful. Thank you so much!!