Help to buy isa

natasha22

Hello, im struggling with understanding my help to buy isa and want to check my understanding.

Basically we have enough money without the bonus to cover a 10% deposit. However if we do that for the exchange deposit what then happens with the bonus money?

For example if my bonus was 1000, and house 100,000. If i paid my 10,000 deposit then claimed the 1000, would the 1000 be used for solicitors fees or would it just be given back to us? My fear is that then the 1000 just goes towards reducing the mortgage so we would owe 89,000 rather than 90,000.

We can get the deposit without it so dont want to do the suggested thing of asking for a lower exchange deposit if that might jeopardise the sale, but could do with the goverment contribution to cover solicitors fees, decorating etc

eskbanker

The bonus must be used towards the purchase price of the property (not solicitor fees or back to you for other purposes), so in your above example you'd need to use it to reduce the mortgage.  Speak to your solicitor about how to structure payments with that in mind....

natasha22

So can you not use the bonus towards a deposit?

eskbanker

natasha22 said:

So can you not use the bonus towards a deposit?

The term 'deposit' is unhelpfully ambiguous, but HTB ISA bonuses can only be put towards the mortgage deposit (remaining gap between mortgage and purchase price at completion) not the exchange deposit (advance downpayment made when exchanging contracts).  This is explained further at https://www.moneysavingexpert.com/savings/help-to-buy-ISA/#tip10

Tubularbells

Hi v. new to this forum!
post moved to new thread?