LISA without a mortgage

RAFMAC

My daughter has a Stocks and Shares LISA and looking to get her first house we are looking at helping her out.
Does she need to have a mortgage to be able to access her LISA?
As it is stocks and shares LISA would that have to be converted to a cash LISA before moving forward?  As stocks and shares LISA's can go up and down?
Thanks

_Penny_Dreadful

RAFMAC said:

My daughter has a Stocks and Shares LISA and looking to get her first house we are looking at helping her out.
Does she need to have a mortgage to be able to access her LISA?
As it is stocks and shares LISA would that have to be converted to a cash LISA before moving forward?  As stocks and shares LISA's can go up and down?
Thanks

Yes, to use the LISA to purchase her first home your daughter will need to use a mortgage. 

https://www.gov.uk/lifetime-isa/withdrawing-money-from-your-lifetime-isa

No, she doesn’t have to move the stocks and shares to cash before moving forward. 

Albermarle

No, she doesn’t have to move the stocks and shares to cash before moving forward. 

However it could be a good idea to do that, in case of a sudden slump in stock markets just before the purchase.

RAFMAC

Many thanks to both for your help also the link. Will now look at which bank or building society will do the smallest mortgage. Much appreciated.

vic_sf49

As you have the funds, and she is only getting a mortgage to use the LISA, look for one that doesn't have an early repayment charge, like a variable mortgage, then you can pay it off as early as you like.

Don't know if you can pay it off as soon as day 1, but worth investigating.

I took a variable one out a while back, knowing I could pay it off in the 5th month. 

se2020

You'll have to do the maths and see if it's worth getting a mortgage just to take advantage of the LISA.
If you buy without a mortgage you (and you need the funds from the lisa) she can only loose a maximum of £1750 of her own money and I can't see many mortgages (arrangement fee and erc) being cheaper than that?

If there are 2 of them buying (and they both have lisa's) then take both I to account. 

Although,  if she needs all of the current funds in the lisa for the purchase then she will need the mortgage anyway. 
If funds are that tight then a mortgage is probably not a bad idea anyway as that would leave some cash left over for a safety net and other 'new house' expenses. 

cheekyweegit

Although I was too old for a Lisa when I took out my first mortgage and only needed a small one, minimum at the time Nationwide would lend was £25k, so I took out a tracker mortgage and once my purchase went through I made a lump sum payment to it penalty free, and cleared the rest of the mortgage a year after taking it out again penalty free.

Again as it was a tracker mortgage, I could make unlimited overpayments, so could this be an option, take one out and once the purchase has gone through just clear the mortgage if you can or even re-mortgage to a more suitable option.

Take into account any fees for taking out the mortgage though in your calculations.