In late 2015, the government launched the Help to Buy ISA scheme. The Scheme will provide a cash contribution towards a new homeowner deposit if they are able to meet a suitable level of saving.
As experienced residential conveyancers, we will assist our clients in making the most of, and understanding, the complex legal aspects of Help to Buy. We will ensure that your loan agreements and paperwork are suitable and accurate and provide advice and legal guidance along the way.
Everything you need to know about Help to Buy ISAs
What is a Help to Buy ISA?
This all new type of ISA is an agreement with the government which rewards savers with a cash bonus on top of their own contributions. Save up to £200 per month with a Help to Buy ISA and the government will contribute a further 25% of everything you save, that’s a monthly contribution of up to £50.The government bonus will be capped at a total of £3,000 on £12,000 of savings. First time buyers will then receive the government bonus at the point they are ready to buy their first home. It can be put toward homes that are worth a maximum of £450,000 in London and £250,000 in all other areas of the UK.
You can also contribute a further £1,000 when you open your Help to Buy ISA and benefit from a £250 contribution to get you started.
Am I eligible for the scheme?
The Help to Buy ISA is only available to first time buyers, aged 16 or over. There is no specific salary requirement for eligibility. If you are old enough, and buying your first home, you can apply for an ISA.
Can my partner get one too?
Help to Buy ISAs are for individuals, it’s not about who’s buying the house, it’s simply about whether you’re a first-time buyer. For Example:
If you’re a first-time buyer, buying with someone who’s owned before, you CAN open one, they CAN’T. If you’re a first-time buyer, buying with another first-time buyer, you CAN BOTH open one. So, together, you can save £400 a month and double the bonus.
Is there a limit to what the government will contribute?
Yes. The government will contribute a maximum of £3,000. But bear in mind that you will have to contribute £12,000 to receive that bonus.
What is the minimum I could save?
The minimum you will need to spend to gain a bonus is £1,600, which will earn you a £400 contribution from the government.
How will the government bonus be paid?
When you’re ready to buy, to get the bonus, you close down your Help to Buy ISA account. You’ll then receive a closing letter from your ISA provider, which you need to give to us.
We would then use the letter to apply online for the government bonus. However, you can only use the bonus for your mortgage deposit, not your home deposit. What this means in practice is that the Government bonus can’t be used toward the deposit you pay to the seller when you exchange contracts, it can only be used at completion.
When can I open my Help to Buy ISA?
You can open your account today up until December 2019.
When can I have my account until?
There is no limit to the amount of time you can use your account and pay into it.
How many Help to Buy ISAs can I have?
Unlike other ISAs, you are only allowed a single account, from a single provider.
Where can I get one?
Help to Buy ISAs are available from all banks and building societies, and interest rates will differ from one to the next. The bonus will remain the same, but the amount the bank contributes in increments will differ from one to the next.
Feel free to contact MoveHomeFaster today to find out more about Help to Buy ISAs and everything you are entitled to, call us on 01270 263263.
For a free conveyancing quote without obligation for buying or selling a property please visit www.movehomefaster.co.uk. We’re here to help…
