Help to Buy ISA closing statement

Brokenlynx

Hi all, 

Just need a little clarification on this last part of the buying process. 

I've currently got a Help to Buy ISA with HSBC and also am looking to exchange on a property on the 12th December (10 days time). 

I was just wondering what the procedure is for claiming the 25% bonus on the ISA. 

I understand I need to obtain the 'closing statement'. 

Is this essentially just a regular statement from the point at which the account is closed? Should I just call HSBC asking for the account to be closed and send me a statement that I then forward to my conveyancer?

Just looking for clarification to make sure I don't somehow end up missing the 25% bonus.

Thanks in advance.

eskbanker

Brokenlynx said:

I've currently got a Help to Buy ISA with HSBC and also am looking to exchange on a property on the 12th December (10 days time). 

I was just wondering what the procedure is for claiming the 25% bonus on the ISA. 

I understand I need to obtain the 'closing statement'. 

Is this essentially just a regular statement from the point at which the account is closed? Should I just call HSBC asking for the account to be closed and send me a statement that I then forward to my conveyancer?

Just looking for clarification to make sure I don't somehow end up missing the 25% bonus.

The HTB ISA bonus money is only usable at completion rather than exchange, so you hopefully have more time, which is just as well, because you wouldn't be able to get it by the 12th!

As clarified at https://www.hsbc.co.uk/savings/products/help-to-buy-isa/

When you’re ready to buy the property, contact us to close your account. We’ll give you a closing statement, which you’ll need to pass to your solicitor or conveyancer so they can claim the government bonus for you.

Please note that you can't use the government bonus to cover any costs before completion or to use as the deposit when you exchange contracts.

and the full scheme rules highlight a seven working day timescale for the closing documents (but HSBC may better this):

A Help to Buy: ISA Holder shall be entitled at any point to request the Eligible ISA Manager of their Help to Buy: ISA to close their Help to Buy: ISA. Upon such request, an Eligible ISA Manager shall make Closing Documents available to the Help to Buy: ISA Holder within seven Business Days of that Help to Buy: ISA being closed.

and then, once the conveyancer has submitted the bonus request, it should be paid within a further five working days:

Once you have submitted these relevant details via the online form, you will receive a unique bonus order number. If you are registered with the Help to Buy: ISA scheme, you should receive confirmation of approval and payment within 5 business days.

Your conveyancer should know all this, so discuss the timings with them....

Brokenlynx

I actually am slightly surprised by this because I would've thought the help to buy ISA would help people to do the hardest part of buying (at least as first time buyers), the deposit. 

Just to clarify, is it only the bonus money that can't be used for the deposit? 

In other words, lets say my HTB ISA account has £10k, could I use the £10k to finance part of my deposit at exchange whilst waiting on the £2.5k (25% bonus) as additional funds after completion?

eskbanker

Brokenlynx said:

I actually am slightly surprised by this because I would've thought the help to buy ISA would help people to do the hardest part of buying (at least as first time buyers), the deposit. 

Just to clarify, is it only the bonus money that can't be used for the deposit? 

In other words, lets say my HTB ISA account has £10k, could I use the £10k to finance part of my deposit at exchange whilst waiting on the £2.5k (25% bonus) as additional funds after completion?

Yes, the bonus money needs to be used towards the property value at completion, rather than after it, but the rest can be used at exchange - the term 'deposit' is ambiguous so the MSE article explains:

https://www.moneysavingexpert.com/savings/help-to-buy-isa/#section-5

masonic

Brokenlynx said:

I actually am slightly surprised by this because I would've thought the help to buy ISA would help people to do the hardest part of buying (at least as first time buyers), the deposit. 

Just to clarify, is it only the bonus money that can't be used for the deposit? 

In other words, lets say my HTB ISA account has £10k, could I use the £10k to finance part of my deposit at exchange whilst waiting on the £2.5k (25% bonus) as additional funds after completion?

 The bonus money (£2.5k in your example) goes towards the mortgage deposit, but it can be used at exchange if you exchange and complete on the same day. The balance of the closed HTB ISA (£10k) can be used for anything you wish, it is only the bonus money that has strings attached.

The HTB ISA scheme was replaced by the Lifetime ISA, which allows penalty free withdrawals to be made for exchange as well as completion, in part because of this issue.

notmartin

hi, can anyone answer the following please? Sale agreed on property., signing mortgage docs in coming days. Bank said to do account closure of H2B ISA to bring letter to solicitor. Solicitor office confirmed this (but it wasn't the actual solicitor). I did this. (it was a closure, not a transfer).

Now the solicitor says I shouldn't have closed it yet as I'm 'not in contract for the purchase of the property'. 

Very concerned now about my bonus, yet everything I've seen (from the links above) says the process is 'save money, find a property, close the ISA, give closure letter to solicitor.' These steps seem to me that I've done everything right but I'm concerned at the implication I closed too early somehow??

can anyone shed light on this please?

many thankks

masonic

Upon closure you have 12 months to complete the purchase. That seems like enough time given where you are in the process. The risk is obviously that it falls through if you've not yet exchanged contracts (solicitor would be unable to issue a purchase failure notification to allow you to reinstate the HTB ISA). On the other hand, leave it too late and the money might not be received in time.