Could you benefit from a Lifetime ISA?

What could be better than boosting your savings by further 25% when you are planning to buy a house? Could you benefit from a Lifetime ISA?

Here’s a couple of facts about a Lifetime ISA (LISA):

• A Lifetime ISA can be opened by anyone aged over 18 and under 40

• Savings made before 50 attract a 25% bonus from the Government (capped at £1000 per year).

• This bonus is paid monthly, so interest can be earned on the bonus too.

• A maximum of 4000 can be saved per tax year with no monthly limit.

• Savings can be used to buy a first home, to provide benefits in retirement from age 60, or in case of a terminal illness with less than a year to live.

• If savings are withdrawn for any purpose other than those stated above, a 25% charge is applied.

• If you have both a Help-to-Buy and Lifetime ISA, the benefit from only one of these can be used for a first home purchase.

To be able to buy your first home with LISA savings and bonus you must meet the below conditions:

• the property costs £450,000 or less

• you buy the property at least 12 months after you make your first payment into the Lifetime ISA

• you use a conveyancer or solicitor to act for you in the purchase

• you’re buying with a mortgage

If you have any other questions about buying a house, get in touch with us!

Extra capital raised on re-mortgage to help buy your first house to let!

Re-mortgage can be an opportunity to review your strategy and to see what can be done to start building your investment property portfolio .

Our success story this week is of clients who bought their first home with very little deposit 2 years ago and, on re-mortgage, we have now managed to get a deal that will let them borrow extra £30k to invest in their first property to let! This is a great outcome after only 2 years when they first bought a residential house.

Property values have increased over the last year and, despite all Covid related distractions, the market is very busy. It may be a good thing if you want to borrow extra capital on your home.

Every time your property grows in value, you gain more and more equity (ownership) which can mean benefits like:

• an option to borrow more,

• option to renegotiate your interest, or

• option to reduce the term of the mortgage.

Remember, every case is different and it has to be assessed on its own merit but when you are planning your re-mortgage, you should not just assume that switching product with the same lender is the only option available for you. Have a chat with a mortgage adviser to discuss what can be done.

Help to Buy repayment - All you need to know!

If you had bought your house with the Help to Buy Loan and you would like to borrow extra on Re-mortgage to be able to clear that loan, it may be possible but you need to bear in mind that there are a couple of requirements you need to meet:

• You will need your house valued by a RICS Certified Surveyor – this valuation is only valid for 3 months so plan the process in advance. You need to pay for this survey.

• You could repay your equity loan in full or in part

• You will need to complete a redemption form and send it to Target together with an administration fee of ca. £200- £250

• You will receive a redemption quote based on the amount of loan you wish to settle (full – 20% of property value, or partial – 10% of property value)

• You will need to appoint a solicitor to deal with the Help to Buy loan repayment process, so bear in mind the extra cost for legal fees and solicitor fees as well.

• You will need to check whether you can actually afford to borrow more so before you do anything at all, contact a mortgage broker to check your affordability and credit worthiness.

There are other ways to settle the Help to Buy loan so if you need more information, check it here: https://www.gov.uk/.../how-to-repay-your-equity-loan...