Lifetime ISA + getting first mortgage on a cash buy

askmse

Hi all,

New to this forum and had a question on using a Lifetime ISA for a first home.

My client bought a house in cash with borrowed cash funds due to the house being derelict through damage, so no lenders would approve a mortgage on it, as it was inhabitable. The house has always been in his name.

Now that he has the damage fixed, he is hoping to get a mortgage to repay the funds, and has a Lifetime ISA he was hoping to use.

My understanding is that this Lifetime ISA can only be used on a deposit and because the home is already in his name, it would be more like a re-mortgage, so could not be used against the repayment value.

As it is for the same residential home, it still falls within the guidelines and rules of the government - just that it is going down as a down-payment and not as a deposit.

Does anyone have any experience or know of any way he can still access the funds?

Thanks in advance!

eskbanker

He can access the funds in the LISA, but the withdrawal would be subject to the 25% penalty, as he wouldn't be a first time buyer, as defined by being able to declare that he's never owned property before.