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    • MissMarble
    • By MissMarble 12th Jul 18, 1:45 PM
    • 59Posts
    • 54Thanks
    MissMarble
    Are HTB ISAs worth it?
    • #1
    • 12th Jul 18, 1:45 PM
    Are HTB ISAs worth it? 12th Jul 18 at 1:45 PM
    Hi everyone,

    I'm in the process of buying a house (already exchanged, complete next week!) and my solicitor has asked me to send a closing statement for my HTB ISA. I set this up last year and have added each month to it and received a good interest top up.

    However, now we have exchanged I'm wondering whether it would be useful to use the HTB ISA money for it's intended purpose or whether it would be better to use the money to help with refurbishment of the house.

    As I set it up a while ago, I'm struggling to remember what the benefits of it are aside from the government bonus - what would it actually do to my mortgage payments?

    Has anyone used it and seen any benefits or not used it and used the money for other things (i.e. house renovation)?

    Thank you!
Page 1
    • wjr4
    • By wjr4 12th Jul 18, 1:54 PM
    • 420 Posts
    • 267 Thanks
    wjr4
    • #2
    • 12th Jul 18, 1:54 PM
    • #2
    • 12th Jul 18, 1:54 PM
    You won't get the bonus if you use it towards house renovation.
    I am an Independent Financial Adviser (IFA). Any posts on here are for information and discussion purposes only and should not be seen as financial advice.
    • MissMarble
    • By MissMarble 12th Jul 18, 1:59 PM
    • 59 Posts
    • 54 Thanks
    MissMarble
    • #3
    • 12th Jul 18, 1:59 PM
    • #3
    • 12th Jul 18, 1:59 PM
    You won't get the bonus if you use it towards house renovation.
    Originally posted by wjr4
    Thank you for your reply - yes I understand I won't get the bonus, I'm just a bit confused about the point of a HTB and how it will be beneficial to my mortgage in the long run?
    • marliepanda
    • By marliepanda 12th Jul 18, 2:05 PM
    • 6,562 Posts
    • 14,105 Thanks
    marliepanda
    • #4
    • 12th Jul 18, 2:05 PM
    • #4
    • 12th Jul 18, 2:05 PM
    Thank you for your reply - yes I understand I won't get the bonus, I'm just a bit confused about the point of a HTB and how it will be beneficial to my mortgage in the long run?
    Originally posted by MissMarble
    Errrrm. What is the problem?

    Its not 'beneficial' to your mortgage other than it makes it lower, and therefore payments should be lower.

    Its simply a boost to the deposit. I don't understand where the confusion is.

    If you don't want the bonus money, then withdraw it and use it for whatever you want, new car, jacuzzi bath, mcdonalds brekkie...
    • thermal2844
    • By thermal2844 12th Jul 18, 2:07 PM
    • 108 Posts
    • 104 Thanks
    thermal2844
    • #5
    • 12th Jul 18, 2:07 PM
    • #5
    • 12th Jul 18, 2:07 PM
    It is free money towards the purchase price of your house, what's not to like?
    • Norman Castle
    • By Norman Castle 12th Jul 18, 8:51 PM
    • 7,408 Posts
    • 6,175 Thanks
    Norman Castle
    • #6
    • 12th Jul 18, 8:51 PM
    • #6
    • 12th Jul 18, 8:51 PM
    I'm just a bit confused about the point of a HTB and how it will be beneficial to my mortgage in the long run?
    Originally posted by MissMarble
    The 25% bonus is money you will not have to pay into your mortgage. Take the bonus and fund the renovations separately.


    Have you worked out how much your 25% bonus is?
    Don't harass a hippie. You'll get bad karma.

    Never trust a newbie with a rtb tale.
    • mangog
    • By mangog 12th Jul 18, 10:22 PM
    • 79 Posts
    • 111 Thanks
    mangog
    • #7
    • 12th Jul 18, 10:22 PM
    • #7
    • 12th Jul 18, 10:22 PM
    It's free money! Claim the bonus and you'll have more money for the renovation work.

    For example, say you have 15k in account A and 5k in your HTB ISA. Your deposit is 15k.

    If you use just the money in account A - the full 15k - you have 5k for renovations left in the HTB ISA.

    If you use a combination of the Account A and the HTB ISA, the government will give you 25% of your HTB ISA total - meaning you effectively have 6250 to use towards your deposit. This means you only need to take 8750 from account A to make up the 15k deposit, leaving you with 6250 in account A for renovations.
    • diggingdude
    • By diggingdude 12th Jul 18, 10:32 PM
    • 385 Posts
    • 491 Thanks
    diggingdude
    • #8
    • 12th Jul 18, 10:32 PM
    • #8
    • 12th Jul 18, 10:32 PM
    Its not hard, free money. Are you sure you are not getting confused by the help to buy equity scheme?
    House Deposit - Target 20000 April 2019
    Current Savings - 10225 13121.22 14621.22 16021 17296
    • MissMarble
    • By MissMarble 13th Jul 18, 1:54 PM
    • 59 Posts
    • 54 Thanks
    MissMarble
    • #9
    • 13th Jul 18, 1:54 PM
    • #9
    • 13th Jul 18, 1:54 PM
    Hi everyone,

    Thank you for your replies - to give a bit more of a background:

    - I've saved around 3,800 in the HTB ISA account
    - My government bonus would be 950

    I worked it out that if we used the 3,800 over the course of our mortgage it wouldn't be that much off each month - is that correct?

    While the 950 would be a great bonus to have, I just feel that the 3,800 would take us a lot longer to save up again for and could be used to help things like a potential re-wire/plastering etc.

    I called my bank yesterday to see if they could help and there just seems to be so much confusion as to how it can be used.

    I need to make a decision today about what to do with the HTB ISA and to say I'm confused is a bit of an understatement! Maybe it's just the whole house buying process stress which is starting to catch-up with me. Thank you for the help!
    • CarbonImage
    • By CarbonImage 13th Jul 18, 4:30 PM
    • 30 Posts
    • 27 Thanks
    CarbonImage
    Presumably you are using money from another account to make up the deposit?

    Say for argument's sake you need exactly 3800 for repairs. Just keep 3800 of the deposit money back for this, and use the 3800 that's in your HTB ISA. That way you get 950 free.

    You probably should have made this decision earlier in the process to be honest, but either way I would not be turning down a free 950, regardless of whether it was against my mortgage or otherwise!
    Mortgage
    [Jun 2017: 164,995 ] [Jun 2018: 161,238.46]
    • MissMarble
    • By MissMarble 13th Jul 18, 4:46 PM
    • 59 Posts
    • 54 Thanks
    MissMarble
    Presumably you are using money from another account to make up the deposit?

    Say for argument's sake you need exactly 3800 for repairs. Just keep 3800 of the deposit money back for this, and use the 3800 that's in your HTB ISA. That way you get 950 free.

    You probably should have made this decision earlier in the process to be honest, but either way I would not be turning down a free 950, regardless of whether it was against my mortgage or otherwise!
    Originally posted by CarbonImage
    Hello, thank you for your reply. We've already exchanged and so the deposit came from other money we had saved. We do have some money left over from our deposit fund, however we are hoping to save the rest for furniture/more work and general back-up money. I've tried to speak with my solicitor but haven't had much luck as to what would be best to do and I've been passed through various people at the bank with the HTB queries. So the 3,800 would come off our mortgage payments essentially over the next 25 years?

    Thank you again.
    • diggingdude
    • By diggingdude 13th Jul 18, 5:10 PM
    • 385 Posts
    • 491 Thanks
    diggingdude
    your solicitor sadly is probably banging their head on their desk and thinking "there's always one"
    House Deposit - Target 20000 April 2019
    Current Savings - 10225 13121.22 14621.22 16021 17296
    • aries_163
    • By aries_163 13th Jul 18, 6:14 PM
    • 7 Posts
    • 3 Thanks
    aries_163
    Go into your bank branch, close the account and get the closing statement for your iSA. The current funds in your iSA will then be transferred to an account of your choosing eg another one of your personal accounts.
    Send the closing statement to the solicitors and they will claim the bonus from the government (assuming then have time now that you have already exchanged).
    On completion date the 950 bonus will go into the !!!8216;pool!!!8217; of money your solicitor has for your house purchase.
    This means if you already have paid your full mortgage deposit to them, then they transfer 950 back to you post completion.
    It!!!8217;s a no brainier! Claim it!!!
    • mangog
    • By mangog 14th Jul 18, 12:08 AM
    • 79 Posts
    • 111 Thanks
    mangog
    I think you may be confused about what the HTB savings and bonus are intended for. This amount is supposed to form part of your deposit, not go towards paying off the remainder of your mortgage. The idea is that the bonus gives your deposit fund a boost because for many FTBs it's the deposit that is the biggest hurdle, not the monthly repayments (although in practice you generally still need to have funds equal to the bonus available for exchange and you get the bonus back afterwards).

    As you've already paid your deposit from funds that weren't saved in the HTB ISA I'm not sure whether you can actually claim the bonus. If you had closed the ISA before exchange and used that money towards the deposit you'd then claim the 950 bonus to be paid back to you. I don't know how it would work at this stage though because you have to show that you saved those funds in the HTB ISA by submitting a closing statement in order to claim the bonus. But it may be enough to get a closing statement now, and your solicitor may still be able to claim the 950 bonus because you can prove that you saved that same amount via the HTB ISA scheme. You'd then keep the 3800 that was in your ISA (as you've effectively already paid this in your deposit) so it's just free money ON TOP of the money you've saved. You don't have to pay the 3800 twice.

    Hope that makes sense, but talk to your solicitor about your options at this stage as I'm no expert - this is just what I've learnt from saving in my HTB ISA.

    Good luck with the move!
    • Norman Castle
    • By Norman Castle 14th Jul 18, 7:26 AM
    • 7,408 Posts
    • 6,175 Thanks
    Norman Castle
    So the 3,800 would come off our mortgage payments essentially over the next 25 years?
    Originally posted by MissMarble
    3800 plus 950 is 4750. How much will that cost in interest payments over 25 years?
    Don't harass a hippie. You'll get bad karma.

    Never trust a newbie with a rtb tale.
    • takman
    • By takman 14th Jul 18, 10:42 AM
    • 3,647 Posts
    • 3,276 Thanks
    takman
    Hello, thank you for your reply. We've already exchanged and so the deposit came from other money we had saved. We do have some money left over from our deposit fund, however we are hoping to save the rest for furniture/more work and general back-up money. I've tried to speak with my solicitor but haven't had much luck as to what would be best to do and I've been passed through various people at the bank with the HTB queries. So the 3,800 would come off our mortgage payments essentially over the next 25 years?

    Thank you again.
    Originally posted by MissMarble
    Who have you left it so late to think about using your HTB ISA, you should have closed it before exchange and got the statement ready.

    This is some misinformation in this thread but this is how it works:

    You close your HTB ISA and you get the balance plus interest sent to an account of your choice to spend how you want.
    You get a closing statement and your solicitor uses this to claim the bonus which goes towards completion funds.
    So once completion happens you should get this amount of money back because you will have overpaid in total.

    But you may have left it too late and lost out on the free money.
    • datlex
    • By datlex 15th Jul 18, 11:50 AM
    • 1,766 Posts
    • 1,666 Thanks
    datlex
    When I was ready to exchange the solicitor gave me a statement detailing my full bill including both the property value and their fees, they then showed how much was being funded, i.e. mortgage, incentive payment, fees already paid for surveys and then how much I was left to pay i.e. the deposit and remainder of their fees. At this point I went to the HTB provider and they arranged the closing statement, my solicitor advised how much I needed to pay to exchange and then on receipt of the closing statement claimed the HTB bonus. I hadn't had my HTB very long, however the bonus was more or less equivalent to my solicitors fees - so effectively I got that for free.
    • Firsttimebuyer2018
    • By Firsttimebuyer2018 16th Jul 18, 8:32 AM
    • 11 Posts
    • 4 Thanks
    Firsttimebuyer2018
    Well it's 25% back free off the government? So I'd say yes! With my HTB when I closed it I had to withdraw the money from there into my own account and my solicitor then got the bonus which went towards my deposit.

    I was under the impression this isn't how it normally works! So if yours is the same you can still get your bonus but use that 3800 for home improvements.
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