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## Financial Dilemma: Applying for a Help to Buy ISA

In November 2019, I made a last-minute decision to apply for a Help to Buy ISA, just before applications closed. Fast forward to the present, I have diligently saved nearly £10k in it by contributing £200 a month. Now, I am on the brink of purchasing a house and claiming the £3k bonus that comes with it. However, I have hit a roadblock – the house I want to buy exceeds the £250k limit set by the program. To make matters worse, there is no possibility of this limit being updated as the Help to Buy ISA is no longer available.

## Seeking Financial Guidance: The Role of AI Legalese Decoder

In this perplexing situation, the AI Legalese Decoder can be a valuable tool in deciphering the intricate legal language and regulations surrounding your Help to Buy ISA. By utilizing this technology, you can gain a better understanding of the contractual obligations and limitations associated with your ISA. This enhanced clarity can help you make informed decisions about your next steps and financial future.

## Moving Forward: Evaluating Options and Making Decisions

Amidst the disappointment and uncertainty, it is crucial to assess your options carefully. Should you withdraw all the funds from the Help to Buy ISA and transfer them to a savings account or allocate them towards Premium Bonds? By weighing the pros and cons of each choice and considering your long-term financial goals, you can formulate a strategic plan that aligns with your aspirations. Remember, seeking advice from financial experts and leveraging tools like the AI Legalese Decoder can provide you with the insights needed to navigate this challenging situation effectively.

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29 Comments

  • nivlark

    Unless you were unsure if you’d be buying a house at the time, it probably was a mistake to open a H2B rather than a Lifetime ISA which is what replaced them, and which has a more useful £450k purchase price cap.

    Saying you’ve ruined your future would be an exaggeration though, you can close the H2B without penalty and get back all your contributions plus the interest earned on them.

    If you will buy within the next twelve months, then transfer the money to the highest-paying easy access account you can find.

    Otherwise, you could still open a LISA and dump £4k in, which would at least get you £1k bonus. It’s a shame you didn’t figure this out a week ago, as the tax year has just ended so if you’d been quicker you could’ve moved another £4k.

  • Christine4321

    What sort of deposit though were you thinking of? Even with the 3k and taking a 95% mortgage, that would be max £260k.

    However, I think youre talking about the Help to Buy ISA. That wasnt a guaranteed £3k, that was a ‘25% of your savings‘ bonus up to a max of £3k.

    The £250k limit is also outside London. In London its £450k. Are you really struggling to find a nice starter property outside London for £250k?

  • MoistConvo

    We did the same but depends how much is the difference compared to what you were looking at? If it’s just over say 260-270k they may opt for you instead as a first time buyer with no chain

  • Mighty_joosh

    If you’re buying over the cap you just don’t use the bonus 🤷‍♂️ you haven’t lost anything you’re just not getting something you thought you might

    If the house is under the LISA limit you can transfer to that and use that limit (it would have been better doing this a week ago and you would have been able to use two years’ allowances)

    But at the end of the day you still have your deposit and the interest, just no gov bonus

  • Any_Bunch6576

    You made a suboptimal choice, but “Life is ruined” is a massive stretch.

    it would take you 2 and a bit years to move the 10k into a LISA, so you could delay buying by slightly over 2 years (which I would recommend anyway if your house is going to cost more than £250k and you were only expecting to have a £13k deposit).

    Or you can forgo the £3k bonus and just use your £10k now.

    Neither one of these is really “life ruining” is it?

  • new-moon64

    You can transfer your right to buy isa into a lifetime isa. It’s a reasonably simple process and a quick search will tell you all you need to know. Your bonus will stay intact.

  • Ok_Strength4138

    If you want to buy a house that costs more, you can just transfer your money out and not use the £3000 bonus

  • halfajob

    Also you can’t use the bonus amount towards the deposit, it’s usually deducted from fees or given back to you at the end so it won’t make a huge difference to your purchasing power, plus with this info it means you can carry on transferring over whilst you’re in the buying process (could take a year+) for extra bonus £.

  • legosophie

    This exact thing happened to me 3 years ago as I was not on top of it. It sucked but I have made my peace with it now. I think there are also much worse financial situations people get into that have much worse consequences, try not to let it eat you up and focus on the things you can control now

  • cosgrove10

    Piggybacking on this thread;

    I have a H2B ISA with 10.3k in it at the moment. I won’t be using it within the next 12 months. Should I keep cracking on with my £200 contributions? Or what should I do?

    Any advice is greatly appreciated.

  • AnalysisOrnery5255

    Buy a cheaper house to renovate and sell on, make some more money for a bigger deposit on another house, rinse and repeat repeat until you have the house you want in the area you want

  • No-Apricot-935

    Most likely too late now, but I was in the same situation. I’m also in a position where Lifetime also would not be something I could potentially utilise with local house prices.

    I managed to remove full £12k plus interest in March, and used it to max out my S&S ISA. I am fortunate I don’t need to remove this anytime soon and can get a deposit elsewhere if needed but could be a nice way to bolster that if you can.

  • braydog98

    LISA would’ve been a much better option for you back then, sounds like you jumped on the Help to Buy scheme when everyone was frantically setting up an account before was closed to new applicants. Its only a 3k loss, not the end of the world.

  • Ryoisee

    I don’t mean this in a bad way but perhaps consider seeing a medical professional for anxiety if you genuinely think this qualifies as “ruining your future”.

  • LeKepanga

    You were not Finacially Stupid. In fact if your saving power was near a H2B (£2400/Year) and not near LISA Limit (£4k/Year) then it was probably the smarter move of the two. If at any point you needed – or wanted – to drain that H2B ISA then you could do so penalty free, the LISA you would have lost money taking it out as cash. Has your choice been costly to you – perhaps a little.

  • cybot2001

    Can’t you just transfer the whole balance into a LISA? Granted you’ll have to wait a year to complete.

  • coooolcooool

    I do not understand why so many people have this ISA instead of LISA. I’ve spoken to so many people who think it’s better/ haven’t heard of the LISA. I think the issue is, when it was closing there were loads of these shitty financial influencers telling people to sign up before it closed.

  • Ok_Strength4138

    There’s a £450,000 limit for houses in London and is the same for LISAs (lifetime ISA) which replaced it. House prices keep increasing. It’s almost impossible to find house prices under those figures.

  • [deleted]

    Also, do you think it’s better to take it all out and put it in Premium Bonds? As it will just be sitting there

  • Jazzlike_Freedom_386

    I agree. Im not sure what the govt. Thought a house. Can be had for under 250k or 500k in most areas. U basically now have a retirement lisa that cant be accessed till your 60 years old unless u want to take a hit on 25 % withdrawl penalty

  • [deleted]

    I hope this won’t have lost me thousands in that missed bonus 😳