In this brief blog, we are going to discuss the process of closing a help to buy ISA, what to watch out for during the closure process and how to ensure you get the right help to buy ISA closing letter.
You should begin your Help t buy ISA closing process at least 3 weeks before you intend to complete if you need to use the Help to bu ISA funds for your completion. You will receive a help to buy closing letter which you need to claim your government bonus.
Can I close my help to buy ISA?
Yes, you can close your help to buy ISA but you may only want to close your help to buy ISA when you are in a position to be able to claim a government bonus from your help to buy ISA. If you close your help to buy ISA and you are not yet in a position to claim the government bonus you will lose access to this bonus forever.
If you are closing your help to buy ISA you should be cautious of not making any withdrawals before you closing your help to buy ISA. You should also be sure to inform your help to buy ISA provider that they should not withdraw your funds before closing your help to buy ISA account and providing you with a help to buy ISA closing letter.
To begin closing your help to buy ISA account you should contact your help to buy ISA provider by phone, email or post immediately. You must ensure that your help to buy ISA provider will provide you with confirmation that they have received your request to start closing your help to buy ISA account.
How long does it take for a solicitor to claim help to buy ISA bonus?
It can take a solicitor up to 3 weeks to claim the help to buy ISA bonus. The solicitor simply has to do a few minutes of work and input the information into the help to buy portal for solicitors but it can then take between 1 and 3 weeks for the request to be processed and the bonus to be paid to your solicitor once you have closed your help to buy ISA account.
If you intend to use your help to buy ISA funds towards your completion costs hen you may want to begin the help to buy ISA closing process with enough time before you are due to compete on your mortgage.
Can help to buy ISA be used for solicitors fees?
No the help to buy ISA can be used to pay for anything you want but the help to buy ISA bonus cannot be sued towards any indirect costs of buying a home or the mortgage deposit.
The process of closing your help to buy ISA?
Below are the steps you will need to take to close your help to buy ISA and claim your government bonus.
Once you are ready to buy your home, simply let your help to buy ISA provider know and they will begin the process of closing your Help to buy ISA account. Your help to buy ISA account must be closed before you make a claim for the government’s bonus.
Once you have closed your help to buy ISA account, the help to buy ISA provider will transfer your account to a none help to buy ISA account and then provide you with a closure document as well as a closure statement. Your conveyancer will need the closure document to claim your help to buy government bonus.
Your conveyancer will then submit the documents to claim the bonus from the Government through a help to buy portal which solicitors have access to.
Your help to buy ISA bonus will be paid on the last balance on your help to buy ISA account before the closing process began and it became a £0 balance account. You should avoid making any withdrawals prior to this point to avoid reducing the balance on which you are eligible for the government bonus.
The government bonus is paid towards your home purchase completion costs and not your mortgage deposit or any indirect costs associated with your home purchase.
The closure process can take up to 2 weeks and you have 12 months from when you began closing your help to buy ISA account to claim the government bonus.
Is a help to buy ISA the right answer for you?
Will a lifetime ISA be of better value considering it offers a £1,000 government bonus per year if you save the maximum £4,000 per year? These are things you should consider.
The steps to closing your help to buy ISA account above apply if you want to:
Close a Halifax help to buy ISA
Close a Barclays help to buy ISA
Close a Natwest help to buy ISA
Close a Santander help to buy ISA
Close a Lloyds help to buy ISA
Alternatives to the help to buy ISA
There are other government schemes which may be able to help you get on the property ladder aside from the help to buy ISA. They are listed below.
- Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
- Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy– allows you to buy your home at a discount price.
- Preserved right to buy- same as above.
- Right to acquire- same as above.
In this brief guide, we discussed closing the Help to Buy ISA. If you have any questions or comments please let us know.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.