“I am in my late twenties and looking to buy my first property – a three-bedroom flat. I have been saving my money in a Lifetime ISA and I now have around £50,000 saved up. Can I use the money in this account to pay the deposit on a property?”
If you’ve had your Lifetime ISA (LISA) for over a year, you will be able to cash it out as a first-time buyer; however, there are some requirements that you must meet. As you may know, the government will give you a 25% bonus on subscriptions of up to £4,000 a tax year paid to a LISA. However, you will be subject to a 25% charge if you withdraw money for any reason other than to fund your first residential property, if you are over 60, in serious ill-health, or on death.
As aforementioned, there are a few conditions if you decide to withdraw money from your LISA to purchase your first property:
Getting a mortgage on a flat can be a bit trickier than if you were buying a house; here are some things you may need to watch out for:
You do not have to use your LISA on your property – you may choose to purchase a property that’s worth more than £450,000, or you may decide not to purchase a property at all. If you do change your mind, you have a couple of options. You can take your money now and face the 25% charge, or you can leave your money in the LISA until you turn 60. Once you are over 60, you can access your money without being charged.
Any opinions expressed in this article do not constitute advice. Your property may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for the mortgage advice. The precise amount will depend upon your circumstances, and the type of lending taken. Smith & Pinching’s minimum advice fee is £700.