As a Mortgage Broker in Manchester, most of our customers seem to have heard of the Lifetime ISA yet have no idea what it actually does and how it can benefit you both long and short term.
Most applicants get the Lifetime ISA confused with the Help to Buy ISA, however, despite having similar names, they are very much different to one another. Here is what the Lifetime ISA is, how to qualify for it and why it could be worth considering as a mortgage option.
The Lifetime ISA was introduced in 2017 in an attempt to aid First Time Buyers buying their first home and people wanting to save for retirement. The Lifetime ISA is just a savings account where your money grows tax-free.
As you probably expected, there is a catch. There is a maximum to how much you can save each year and it’s only £4,000. On the other hand, if you add the government’s extra 25%, you will get a total of £5,000 each year.
There is a restriction on how much you can save each year with the Lifetime ISA, this is capped at £4,000. The Government will then give you a 25% bonus on your savings, so a maximum bonus of £1,000 (25% of £4,000).
There are two different ways to how you can spend your savings. You can either use it to buy your first home or save it up for later in life.
If want to put your Lifetime ISA savings towards a new home, you must know that this must be your first property purchase. This is why we often recommend the ISA to First Time Buyers in Manchester if they can afford it.
As we are a Mortgage Broker in Manchester, we only see clients who are using the ISA as their deposit for their first home. So if you are wanting to save for later in life, you can find more information here on the government’s official webpage: https://www.gov.uk/lifetime-isa.
So now you that you know what you can use the Lifetime ISA for, how do you qualify and what are the restrictions?
Lifetime ISA to buy your first home:
If you are interested in the scheme and think that it is for you, feel free to get in touch with your Mortgage Broker in Manchester and we can help you get the ball rolling with your ISA.
Are you interested in the Lifetime ISA and want to begin your mortgage journey or maybe you are curious about other schemes that could match your situation? If so, now could be the perfect time to get in contact with an experienced Mortgage Advisor in Manchester. We don’t just specialise in Lifetime ISAs, we have experience with Self Employed mortgages, Remortgages, Buy to Lets; we know how to help! We love a good challenge and we would love to try and help you make that first step onto the property ladder.