Do you plan to buy your first home at some point in the future? Well now is a great time to make that first step and get your hands on some FREE money to get you started! Yes, I did say FREE! But you have got to act very quickly!
In 2015 the government announced a scheme called a Help to Buy ISA. These are a saving account where you don’t pay any tax on the interest…….and even better, the government will add 25% on top of whatever you save. However, you need to act very quickly because the deadline to open a Help to Buy ISA is this Saturday, the 30th November!
The great news is that you can open an account with as little as £1. You can save up to £1200 into your ISA in the first month and then up to £200 a month. The way it works is that when you come to buy your first home and use the cash ISA to fund the deposit, the government adds 25% to whatever is in your ISA, up £3000. This cash bonus is claimed by your solicitor on your behalf when you buy the property. It can be used to buy a house costing up to £250 000 ( or £450 000 in London) and using any mortgage.
You also need to save a minimum of £1600 into the ISA before using to buy your first home. This would get you a £400 top up from government, so it’s particularly useful for those who are not imminently buying a house. However, as you can deposit £1200 in the first month and then £200 per month thereafter, even if you are buying a house in 3 month’s time, you can benefit!
To be eligible you need to be a first time buyer with a National Insurance number (and be over 16!). In many cases you can open one online in minutes. If you are a couple you can both apply for a Help to Buy ISA separately.
If you decide that you don’t want to use the money in your Help to Buy ISA to fund a mortgage deposit, you money will still gain tax free interest and can take it out whenever you need to, but you just wont get the bonus. Help To Buy ISA rates are often better than normal Cash Isa’s, so it’s worth doing even if you are not 100% committed to buying your own house in the future! And if you have already paid your maximum allowance into a cash ISA this year, you can transfer this amount into a Help To Buy Isa.
So get your skates on and open a Help To Buy ISA today! (or tomorrow ……or Saturday………….but not after!)
Ebony is off to do it- are you?
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