Help to Buy ISAs
Diane Watson outlines the Help to Buy ISA; a Government scheme to support first-time buyers.
With a Help to Buy ISA the government can top up your savings by 25%. So for every £200 you save, the government will contribute £50. You will have to have at least £1,600 in your ISA to be able to claim your bonus from the government.
Help to Buy ISAs are available to each first-time buyer (not each house). Therefore, if you’re buying a property with your partner, you’ll be able to get up to £6,000 contribution towards your deposit (depending upon the amount in each ISA).
You will need to instruct your conveyancer to apply for your government bonus once you’re close to buying your home. In order to enable your conveyancer to obtain your government bonus, they will need the closing letter from whoever holds your ISA and then a completion date should also be agreed.
Once your conveyancer receives the government bonus, it will be added to the money you’re putting towards your first home.
The bonus is paid direct to your conveyancer in readiness for completion of your first purchase.
You can’t use the bonus to pay for indirect costs associated with buying your home (for example, solicitor or estate agent fees).
The bonus aims to reduce the size of your mortgage by increasing the amount of equity you have in the property.
If you have any questions about first time buying or the Help to Buy ISA, contact Anita Jobling on 01228 522399 or firstname.lastname@example.org.
About the author
Diane is a Conveyancer in the Residential Conveyancing team.