Help! Help to Buy: ISA Government Bonus confusion.

Sam3007

Hello there, 
I am a first time buyer and I am so confused as to the time in which the Help to buy ISA bonus is paid!
I have included this bonus which is around £1800 as part of my 15% deposit because my solicitor told me that it is paid between exchange and completion, but when I got in touch with the bank, they said that the bonus is only paid to my solicitor after completion and that I need to sort out another £1800 for my deposit! 
When is the HTB ISA bonus is paid please? and can it be added to the deposit before completion? 

leosummer

according to the official website: www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/

"The bonus must be included with the funds consolidated at the completion of the property transaction. The bonus cannot be used for the deposit due at the exchange of contracts, to pay for solicitor’s, estate agent’s fees or any other indirect costs associated with buying a home."

hope it helps.

Sam3007

leosummer said:

according to the official website: www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/

"The bonus must be included with the funds consolidated at the completion of the property transaction. The bonus cannot be used for the deposit due at the exchange of contracts, to pay for solicitor’s, estate agent’s fees or any other indirect costs associated with buying a home."

hope it helps.

Thanks a lot that is very helpful.

Shay10

I'm also confused about this. Also confused about exchange and completion.  At exchange do you only pay part of the deposit or the full 15%? We also have to put 15% down and I have been told we cant use our bonus towards the deposit and it's only paid after completion.  When I read online it says its paid for the overall deposit on completion.  Keep getting mixed messages.  At the mo because of this I havent included my bonus with my deposit just incase I cant use it as not sure when it will be paid. We are first time buyers aswell and dont understand the process of it all. I hope we can use the bonus in with the deposit because we will have more money than I thought we had for the deposit. 

alex_163163

It might help to think about the term ‘deposit’ in 2 contexts.
1. Exchange deposit = The deposit used at exchange of contracts which effectively ‘seals’ the contract between you and the seller. If you pull out you lose this money. But this isn’t always the same amount as the ‘mortgage deposit’.
2. Mortgage deposit = the equity you are putting into the house purchase up front that isn’t from a mortgage. 

I think typically the exchange deposit is usually 10% of the purchase price but can be negotiated via solicitors. 

It’s probably easier to transfer all your ‘mortgage’ deposit in time for exchange of contracts so that your solicitor has all the funds needed to complete. BUT you might only be liable to lose 10% if for some reason you pulled out after exchange (subject to what has been agreed and written in the contract by your solicitors). 

The HTB ISA bonus is added to the ‘pool’ of money available on completion (as long as your solicitor claims it in time):
Deposit monies, mortgage, money for fees. 

Although it says the bonus can’t be used for anything but the purchase, your solicitor will provide you with a final statement detailing all incoming and outgoing monies, so it all effectively goes into a pool of money available to complete all the transactions on completion day.
hope that helps a little bit! 

Shay10

Thanks for that. Much appreciated