How does help to buy ISA work?

[FTB21]

I’m very confused and hoping someone can help.

I’m currently in the process of buying my first house and I have money saved in a help to buy ISA. I put in an offer which was accepted and I’ve been approved for our mortgage with a 5% deposit (95% LTV). The 5% is the amount of money in my ISA.

My understanding is that after exchange I can get 25% bonus on the amount in the ISA but that bonus can only be used for the mortgage. How does that work? Does it just get given to the mortgage company as like an over payment? Or do I actually need a few thousand pounds less on my mortgage offer?

Depends what the costs are. My solicitor used mine for there fees

You’ll have an amount to pay the solicitor which includes your deposit, their fee for searches etc and the money is used against this bill.

It’s perhaps different with all banks but with mine I had to withdraw all the money and close the account, the bank then sent through a confirmation letter with the bonus amount. I sent this on to my solicitor who took the bonus amount off the amount I owed them.

I wasn’t aware you could use it for fees. I thought you could only use it for the mortgage itself.

That would be great if it could be used for solicitor fees, but the amount of bonus is greater than the fixed quote we were given for solicitor fees.