Help to buy isa - how does it help?

[GorgeousLadyofWrestling]

We have a help to buy ISA. We’re due to exchange in a couple of weeks. Our deposit total hinges on the 1k bonus we should receive.

I always thought that through the solicitor, the help to buy isa is available for a deposit. But reading through it now, it looks like it’s not available at exchange.

However if we take our money out of the isa for the exchange deposit - we won’t get the 1k bonus. Which we need!

So how does it help? I am very confused.

When I closed my Halifax HTB ISA, I was given a reference letter to take to my my solicitor, who then applied for the interest I was due. I think they deducted the amount form my bill.

Ask your solicitor - they have to request the bonus themselves so it arrives when they draw down the funds (IIRC). They should be able to explain it to you. Good luck!

So when you give your deposit on exchange - is it understood that it’s a partial deposit because some of it is coming from the isa - which can’t be accessed until completetion?

I’m very confused and having a last minute panic. Our agreed deposit depends on the 1k bonus. I don’t fully understand the process of exchange and how deposits come into it.

When I showed proof of funds it included details of the isa and that the 1k bonus made up part of the deposit

Yes - I am 99% that's fine! We were in the exact same position - basically when we had to pay (prior to exchange), we received a bill which had the solicitors fees and the cost of the deposit minus the bonus, which the solicitors claimed separately to make up the balance.

I'm sure if you ring them up they would be happy to explain it - towards exchange I was on the phone to them most days with silly questions (nightmare client I'm sure!)

When I took my HTB isa out I was told it could be used as part of the deposit. It wasn't till I went to a first time buyer event, that I learnt that it wouldn't be paid till after exchange. And that the solicitors charged a fee for having one. I was not best pleased and felt it was mid sold. Fortunately I didn't need it for the deposit. But it was really handy to have the bonus afterwards to spend on the house. So for me it worked out well.

With ours we didn’t get the money for a few days after exchange - and used it towards furniture however I don’t know if that is always the case or just how our solicitor applied for it...I would contact solicitor about it.

Above posters have had a different experience to me - I was only allowed to use it as part of a deposit. Didn't realise there were other ways! Best to contact your solicitor directly.

Thanks everyone. As with everything else, it’s as clear as mud

I spoke to HSBC who confirmed that the bonus comes after. So our solicitor will pay it to us after completion. Luckily we will be able to take it out of our salaries - I’m just glad I checked!

Man this whole process makes me so nervous. I so desperately want it to happen and I’m beginning to let myself believe we can actually buy - I never thought we’d be able to and I’m just waiting for something to go wrong. Exchange is supposed to happen in a few weeks so just keeping my fingers crossed it works out.

It's so nerve wracking but you can see the finish line! Good luck with the move 😁

I literally did this yesterday!
When you know you are going to exchange you go into the bank and close down the account. You give them the bank details you want to transfer the money into. This will not include the bonus however. They will give you a closing statement letter which you then need to give to your solicitor and they will apply for the government bonus which will come off your mortgage amount. Some people said it comes off the solicitors fee? Not sure about that, not in my case anyway.
I got mine out of Halifax and they gave the letter then and they however my partner had barclays and it will take 5 days for letter to arrive in post.
So short of it is bonus cannot be used as part of deposit at exchange.

Just reading other replies there and it seems you get the cash from the isa bonus paid to you. I was led to believe it would come off the mortgage by the solicitors so that's good news if that is the case!!

Bit late to conversation here, but you did say you were still a couple of weeks away, so I thought I'd also say how this worked for us. You don't get the money at exchange, but you should be able to use it for the deposit, if your solicitor lets the seller know it will follow the exchange deposit. We let them know, then exchanged with the deposit amount minus the bonus. Our solicitor applied for the bonus and this was then passed on before completion.

You have never been able to use the bonus for your deposit. DS saved his deposit in a help to buy. On completion and after his deposit wa paid to solicitor she claimed the government bonus and deducted her fees and transferred the balance into his bank all on the same day as he got his keys.

A LISA works differently, you get paid your bonus several weeks after each deposit is made into the account.

Posted too soon, so in theory if you have your solicitors fees in the bank use that for your deposit shortfall and the money is just used differently.

www.moneysavingexpert.com/savings/help-to-buy-ISA

Look at number 10 in the Q&A