With the rising costs of living and property prices on the increase it can often feel impossible for first time buyers to make any progress in their savings towards a deposit; the Help to Buy ISA could just be that helping hand to get you started
What is a Help to Buy ISA?
First time buyers could be eligible to benefit from a Help to Buy ISA. These are offered by most High Street banks and provide you with an extra 25% bonus on your savings. This is worked out to be an extra £50 for every £200 saved (up to £3000). What’s even better is that because it is based on an individual if a couple are buying together they each could have a Help to Buy ISA which will effectively double their bonus.
We would encourage all first time buyers to open a Help to Buy ISA – of course, as we are lawyers and not financial advisers we cannot provide any information with regards to the various lenders and your individual eligibility.
How they work?
So you have now found your dream home and you are ready to start the legal process. Once you have instructed your solicitor let them know you have a help to buy ISA but don’t close the account just yet! As a transaction typically takes 6 weeks to go through, you could have up to two (or more) additional payments into the savings account and therefore even more bonus from the Government.
Your solicitor will let you know when to close the account. Typically when you are being asked to sign the contract and completion dates are being discussed. Your solicitor will also have you to sign First Time Buyer Declaration. This is your declaration to the Government that you are First Time Buyer and should only be signed if all the statements are correct.
Once everything is ready speak to your bank and close the account. The bank will send you the ISA balance, plus any interest, into your nominated account. The request will automatically generate a closing statement sent out to you. The statement can take up to a week to arrive so timing is important. Once you have the statement forward a copy to your solicitor as soon as possible.
Fast forward to contracts being exchanged and date for completion has been set. You have provided the solicitor with the ISA funds towards your deposit. Your solicitor will request the bonus from the Government, through a specific portal. The bonus will then be sent to the solicitor’s client account in time for completion.
Here at Jordan’s we are experienced in requesting bonuses for the Help to Buy ISA. We are happy to discuss this with clients should they require additional guidance throughout the process. For more details, feel to contact us on 0330 300 1103 or click here.