The Lifetime ISA (LISA) is a new, modern scheme that helps first time buyers create a housing deposit to get onto the property ladder. This is not to be confused with the recently ended Help to Buy ISA scheme.
This scheme provides buyers with a great incentive to purchase a property using this scheme. There are many many benefits that can only make your mortgage process easier! As a Mortgage Broker in London, we are seeing a rapid increase of applicants with a Lifetime ISA in place.
It is becoming more and more popular, especially with the phenomenal increase in the cost of living. Having a deposit boost in place will benefit your application and could potentially put you in front of other buyers when making an offer on a property.
A Lifetime ISA is a savings account where your money grows tax-free. It works just like a normal savings account where you can add money in lump sums or through smaller monthly instalments, it’s completely up to you.
For every penny that you save, you will receive a 25% government bonus. The way that this works is that every tax year, whatever the amount is that you have saved, you will receive an extra 25% bonus on top.
The total amount per tax year that you can save is capped at £4,000. So, the maximum that you can save per year is £5,000 (£4,000 own savings + £1,000 govt. 25% bonus).
You can only access the scheme as a first time buyer in London. And, the funds that you have saved can only be used on your first property.
Once money has been transferred into the ISA, it cannot be withdrawn without a 25% charge. For example, if you were trying to withdraw £500 from your ISA, you will only get £375.
There is another way to use your Lifetime ISA, you can use it for later in life savings. As a Mortgage Broker in London, we do not offer advice in this case.
It is also worth knowing that you can also only have one Lifetime ISA in your life, therefore, you will need to decide what you want to use it for.
In order to set up your Lifetime ISA account, you will need to meet the scheme requirements:
Find out more about the LISA on the government’s OwnYourHome website or get in touch with our team at Londonmoneyman. Our first time buyer Mortgage Advisors in London are available to talk 7 days a week, just give us a call!
If the Lifetime ISA sounds like the scheme that can help you make a start on your mortgage journey, make sure to get in touch with our team. First time buyer mortgage advice in London is only one call away!
Alternatively, follow our book online process and select a date and time for your appointment.