In this brief blog, we are going to discuss the help to buy ISA closing letter and why getting your help to buy ISA closing letter on time is important.
The help to buy ISA closing letter
When you close a help to buy ISA which allows you to earn a government bonus of up to £3,000 you should receive your help to buy ISA closing letter which will allow your solicitor to claim for your help to buy bonus. Without your help to buy ISA closing letter you may find it hard, if not impossible to get your government bonus.
To start the help to buy USA closure process you should contact your help to buy ISA provider by phone, email or post. You must ensure you receive confirmation from them that they have received your closure request.
When you contact the help to buy ISA provider you must ensure that you remind them that your help to buy ISA closing letter must show your closing balance at the time of your contact and they should not empty your account and then produce your help to buy ISA closing letter as you may find that your government bonus may be at risk.
This exact scenario has happened to a few people where the help to buy ISA provider transfers all of the funds out of the account to a normal current account or savings account and leaves you with a closing balance of £0 on your help to buy ISA closing letter or statement which entitles you to a government bonus of £0 as your government bonus is paid based on the closing balance on your help to buy ISA account.
The good news is that if your help to buy ISA closing letter has been messed up in this manner you can still claim your bonus through the help of your solicitor. You see, your solicitor simply needs to verify that your statement balance on your help to buy ISA closing letter is wrong and input the correct figure on the online help to buy ISA portal which your solicitor will submit your claim for the bonus.
Another important point is that you cannot claim for the help to buy ISA bonus stated on your help to by ISA closing letter by yourself. You will need to use your solicitor and you should look to get this process started before your mortgage completes.
You must apply for your help to buy bonus within 12 months of closing your help to buy account.
You should try to close your help to buy ISA with enough time if you plan to use any of the funds before you complete your mortgage as getting a help to buy ISA closing letter could take as much as 5 working days.
Can you close a help to buy ISA online?
Yes, you can close your help to buy ISA online. You can do this if you opened your help to buy ISA account online but some providers may insist you call them or visit a branch to close your help to buy ISA account.
How long does it take for solicitor to claim help to buy ISA bonus?
It can take a solicitor as long as 3 weeks to claim your help to buy ISA bonus. If you intend to use your help to buy ISA bonus soon then you should contact your help to buy ISA provider as soon as possible so the process can begin.
What happens if I close my help to buy ISA?
Once you close your help to buy ISA you should receive your help to buy ISA closing letter from your help to buy ISA provider. This will state what your closing balance was before you closed the account. This is the amount on which the government will pay you your Help to buy ISA government bonus.
How to close your help to buy ISA account?
To close your help to buy ISA account and claim your government bonus you should follow the below steps.
Once you are ready to buy your home, simply let your help to buy ISA provider know and they will close 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. Ensure the statement balance on closure is correct and the provider does not withdraw your funds before closing the account and producing a closing statement.
Once you have closed your help to buy ISA account, the provider will transfer your account to a none help to buy ISA account and then provide you with a help to buy ISA closing letter as well as a closure statement. Your conveyancer will need the closure documents and a signed first-time buyer declaration to claim your help to buy a government bonus.
Your conveyancer will then submit documents to claim the bonus from the Government
Your help to buy ISA bonus will be paid on the last balance on your help to buy ISA account before 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.
The closure process can take up to 2 weeks and you have 12 months from when you closed 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.
Alternatives to the help to buy ISA
- 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 the Help to Buy ISA closing letter.
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.