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  • FIRST POST
    • Former MSE Sam M
    • By Former MSE Sam M 1st Dec 15, 3:23 PM
    • 238Posts
    • 159Thanks
    Former MSE Sam M
    Help to Buy ISA guide
    • #1
    • 1st Dec 15, 3:23 PM
    Help to Buy ISA guide 1st Dec 15 at 3:23 PM

    Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
Page 80
    • Jampa9
    • By Jampa9 9th Aug 18, 3:16 PM
    • 4 Posts
    • 0 Thanks
    Jampa9
    It's not really a loophole.

    When the rules talk about not being able to use it for your 'deposit' they mean you can't use it for the deposit that you have to give the seller at exchange of contracts. Because at that point you are not buying a property, you are just committing to buy a property subject to the completion terms which won't happen until later. The HTB bonus can only be used for paying for the property on a successful completion.

    In this case, the seller decided they were happy to accept a low deposit at the time of exchange, to help you out. So they took 4% up front at exchange and 96% at completion, and you funded the 96% with a 95% mortgage and a 1% HTB bonus.

    When the seller agrees to accept a small deposit at the time of exchange (4% instead of 5% or 10%) he is taking a risk that you might fail to complete, and not actually go through with the purchase, leaving him high and dry without much cash in his bank, and needing to sue you for his costs and the problems you cause him. Sometimes, sellers can be in the mood to take a gamble and let you get away with a relatively tiny exchange deposit to help you out. So, you got away with it and he still got paid the 100% in the end, just getting his money later than he was planning

    If anyone else was looking to rely on being able to do what you did, they would be well advised to agree it with the seller very early on. For example if you were giving them £12.5k deposit and they were part of a chain and needed to give £25k to the person they were buying from, exchanging contracts on the same day, and then you said you could only made a deposit of £10k after all, they may not have the luxury of being able to say, ok, just give me a lower deposit and we'll exchange anyway. Because the next person in the chain that *they* are buying from, might not budge on the deposit they want to receive, and your seller in the middle doesn't want to take the difference out of his own pocket and have a cashflow problem and bigger risk.

    The industry standard deposit at exchange is 10%. If you're buying with a 95% mortgage you are probably on the small end of the scale in terms of transaction size and deposit size so a seller may be able to afford to let you do just a 5% deposit instead of 10%. But getting the exchange deposit down further - to 4% because you screwed up the HTB ISA mechanics - is not something anyone should be banking on.
    Originally posted by bowlhead99

    Alright fella, chill out, I'm just telling people of my experience.
    • bowlhead99
    • By bowlhead99 9th Aug 18, 5:44 PM
    • 8,171 Posts
    • 14,938 Thanks
    bowlhead99
    Alright fella, chill out, I'm just telling people of my experience.
    Originally posted by Jampa9
    Yeah, I know that - and thanks for coming back to let us know how it worked out, plenty of people don't bother. I'm just telling people how it works...
    • deutsch
    • By deutsch 15th Aug 18, 12:52 PM
    • 335 Posts
    • 46 Thanks
    deutsch
    i've read a recent news article nationwide are increasing their htb isa by 0.5% but it doesn't say when.


    their own website hasn't updated it yet and still shows 2%.


    anyone any ideas?
    • eskbanker
    • By eskbanker 15th Aug 18, 12:57 PM
    • 7,871 Posts
    • 8,725 Thanks
    eskbanker
    i've read a recent news article nationwide are increasing their htb isa by 0.5% but it doesn't say when.


    their own website hasn't updated it yet and still shows 2%.


    anyone any ideas?
    Originally posted by deutsch
    31 August, according to https://www.nationwide.co.uk/about/media-centre-and-specialist-areas/media-centre/press-releases/archive/2018/8/06-bank-rate-increase:
    Nationwide will pass on the following rate changes to savers from 31 August and to borrowers as of 1 September 2018. These changes include:

    Savings:
    • For those saving for a first home of their own, the Help to Buy: ISA will be increased to 2.50%
    • deutsch
    • By deutsch 15th Aug 18, 6:06 PM
    • 335 Posts
    • 46 Thanks
    deutsch
    I have a HTB ISA with Halifax and a LISA with AJ Bell.
    If I transfer the HTB Halifax ISA to Nationwide's HTB ISA and continue paying £200/ month, will this affect the LISA allowance? This is for the tax year 2018/19 where I have not paid anything yet into the LISA, but have continued to pay £200 to halifax's HTB ISA.
    • Alexland
    • By Alexland 15th Aug 18, 6:27 PM
    • 3,015 Posts
    • 2,354 Thanks
    Alexland
    I have a HTB ISA with Halifax and a LISA with AJ Bell.
    If I transfer the HTB Halifax ISA to Nationwide's HTB ISA and continue paying £200/ month, will this affect the LISA allowance? This is for the tax year 2018/19 where I have not paid anything yet into the LISA, but have continued to pay £200 to halifax's HTB ISA.
    Originally posted by deutsch
    You are fine to contribute to both the HTB ISA (which is a type of Cash ISA) and the LISA in the same tax year up to the individual product maximums. In addition the ISA transfer process will not use any more of your current year's contribution allowance. Be aware you can only use either the HTB ISA bonus or the LISA account towards a property purchase - not both unless you want to pay the LISA early withdrawal charge.

    Alex.
    • katybobatie
    • By katybobatie 19th Aug 18, 11:26 AM
    • 3 Posts
    • 0 Thanks
    katybobatie
    Hey!
    This was all really useful thanks!
    My partner and I have one help to buy isa between us - itís in his name, but I obviously just pay into it via him.
    Anyway, my parents recently gave me £4k contribution and Iím just wondering where I should put this until next year when we should have enough to buy our first house? I donít want to open another help to buy isa. Can I open a normal savings isa in my name?
    • katybobatie
    • By katybobatie 19th Aug 18, 11:27 AM
    • 3 Posts
    • 0 Thanks
    katybobatie
    Hey!
    This was all really useful thanks!
    My partner and I have one help to buy isa between us - itís in his name, but I obviously just pay into it via him.
    Anyway, my parents recently gave me £4k contribution and Iím just wondering where I should keep this until next year when we should have enough to buy our first house? I donít want to open another help to buy isa as we canít really afford to pay into two. Can I open a normal savings isa in my name?
    • TheShape
    • By TheShape 19th Aug 18, 11:56 AM
    • 1,378 Posts
    • 1,242 Thanks
    TheShape
    Hey!
    This was all really useful thanks!
    My partner and I have one help to buy isa between us - itís in his name, but I obviously just pay into it via him.
    Anyway, my parents recently gave me £4k contribution and Iím just wondering where I should keep this until next year when we should have enough to buy our first house? I donít want to open another help to buy isa as we canít really afford to pay into two. Can I open a normal savings isa in my name?
    Originally posted by katybobatie
    Why can't you afford to pay into another HTB ISA? Haven't you just been given £4k?
    • katybobatie
    • By katybobatie 20th Aug 18, 12:40 PM
    • 3 Posts
    • 0 Thanks
    katybobatie
    We can't really afford £200 each at the moment. We've got another few personal commitments.
    Anyway, what I needed some help with was what I can do with this other money. Can I open a Cash ISA? I'm reading you can't have both open at once. The cash isa would be in my name, and the help to buy ISA in my partners name.
    • eskbanker
    • By eskbanker 20th Aug 18, 4:50 PM
    • 7,871 Posts
    • 8,725 Thanks
    eskbanker
    We can't really afford £200 each at the moment. We've got another few personal commitments.
    Anyway, what I needed some help with was what I can do with this other money. Can I open a Cash ISA? I'm reading you can't have both open at once. The cash isa would be in my name, and the help to buy ISA in my partners name.
    Originally posted by katybobatie
    £200 is a maximum monthly payment into a HTB ISA, not a minimum!

    You don't have to pay anything into a HTB ISA in any given month, so I'd echo the advice above and get another one opened, you won't beat the 25% uplift anywhere else.... In your shoes I'd get it funded with the maximum £1200 in the first month and then add to it as and when you can in subsequent months, making sure that you get £1600 into it (even if that means diverting contributions to the other one) by the time you buy.
    • Alexland
    • By Alexland 20th Aug 18, 8:08 PM
    • 3,015 Posts
    • 2,354 Thanks
    Alexland
    As above and remember the HTB ISA money can be partially or completely withdrawn if required without penalty if you need to use the money to meet your other commitments. With a good rate of interest you really have nothing to lose by using the account.
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