Liftetime Isa - Put all £4,000 now for House purchase or too late?

kimmy9999

Hi all,

I have just had an offer accepted on a house today and i have a lifetime isa that i pay £333 into each month so i get the bonus at the end of the year. However as i have just had an offer accepted today for a house, i thought i could transfer the full £4,000 in now from another account to get the £1,000 bonus, but i have read that it might be too late to do this does anyone know? Ive never bought a house before so i have no idea how long it takes for them to go through and how long it takes the government to pay the bonus once i add the full £4,000 in? can anyone clarify please whether it would be worth the risk?

Thanks

Kim

jay1804

It depends on when the exchange or completion takes place. - I think you’ll have plenty of time.

Make sure to inform your solicitor or conveyancer that you’re using a LISA as they need to fill in a specific form. Also research your provider’s withdrawal process and timescales; it can take a couple of days or weeks.

LISA bonuses usually take 4-9 weeks depending on when you deposit the money. Most providers calculate and claim the bonus from 6th of the month to the 5th of the following month. As it the 7th you would have missed the window for this month.

If you were to deposit the funds today the bonus should arrive end of June / early July.

masonic

"I have just had an offer accepted on a house today and i have a lifetime isa that i pay £333 into each month so i get the bonus at the end of the year."

Why would you only get the bonus at the end of the year? Has this LISA been open for a year?

"i thought i could transfer the full £4,000 in now from another account to get the £1,000 bonus, but i have read that it might be too late to do this does anyone know? Ive never bought a house before so i have no idea how long it takes for them to go through and how long it takes the government to pay the bonus once i add the full £4,000 in? can anyone clarify please whether it would be worth the risk?"

As mentioned above, you are looking at late June to receive the bonus. You'd be moving at some pace to exchange by then, but even if you did, £1000 left in the LISA after purchase, or £750 withdrawn after purchase with the penalty, is better than nothing. But it will make no difference to the timing of the bonus if you pay it in now or the first week of June, so no harm in waiting.

I recently managed to complete in just over 6 weeks from offer acceptance, but I was pushing my solicitor quite hard, already had a survey in hand, had no mortgage to arrange, and the seller was very flexible (including completing 2 days after exchange, which is not normal). You'll have some control over how quickly things move, but very likely there will be enough to slow things down naturally for you to receive the bonus money in time.

clairec666

Also worth checking whether your solicitor charges an extra fee for handling a LISA withdrawal. Mine does, and as I had only saved £1000 in the LISA it wasn't worth it after deducting the fee, so I'll leave it there as a retirement fund.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81996026#Comment_81996026

Out of curiosity, how much was the fee? As I recall, £60 was mandated as the maximum charge for processing Help to Buy ISAs but the equivalent for LISAs was never specified in the same way and I believe there is more work for the conveyancer with the latter…

masonic

https://forums.moneysavingexpert.com/discussion/comment/81996478#Comment_81996478

I had an "ISA fee" mistakenly added to a conveyancing quote, which was presumably the same for either. Mine was £50+VAT, so £60 in all. That'll teach me for mentioning using a S&S ISA, though I was clear it wasn't a LISA or HTB ISA.

clairec666

https://forums.moneysavingexpert.com/discussion/comment/81996478#Comment_81996478

I thought it was higher, but turns out it was only £50 (possibly plus VAT?). So not as damaging as I thought. Still, wasn't worth it for me as I could make up the balance without the LISA.

https://forums.moneysavingexpert.com/discussion/comment/81996503#Comment_81996503

My solicitors also asked me if my funds were coming from an "ISA", no reference to LISA, I ticked "no" even though the money is currently held in an ISA, as it will be withdrawn to my current account first and there's definitely no need for any withdrawal fee or extra work for the solicitors.

masonic

https://forums.moneysavingexpert.com/discussion/comment/81996660#Comment_81996660

"My solicitors also asked me if my funds were coming from an "ISA", no reference to LISA, I ticked "no" even though the money is currently held in an ISA, as it will be withdrawn to my current account first and there's definitely no need for any withdrawal fee or extra work for the solicitors."

For me they specifically asked where I was holding the money currently, so I told them with the caveat that it was not a LISA or HTB ISA and there would be no work required of them. They still added the charge, which I then got them to remove once we'd navigated AML/compliance.

eskbanker

it will be withdrawn to my current account first and there's definitely no need for any withdrawal fee or extra work for the solicitors

If you wish to use LISA funds for a first time property purchase, without incurring withdrawal penalties, then the conveyancer has to manage the LISA closure on behalf of the account holder, in terms of ensuring the correct forms are completed before instructing the ISA provider and handling the proceeds - I don't believe it's a particularly onerous process but it doesn't seem unreasonable for them to charge a modest fee for this.

https://www.gov.uk/guidance/conveyancers-first-time-residential-purchase-with-a-lifetime-isa

clairec666

https://forums.moneysavingexpert.com/discussion/comment/81996847#Comment_81996847

I'm not using the LISA, just my "normal" ISA, hence doing the withdrawal myself and no need for solicitor involvement.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81996904#Comment_81996904

Oh right, hadn't picked up on two unrelated ISAs being involved here - out of curiosity, why didn't you pay more into the LISA and benefit from the 25% bonus on it?