You’ve built your deposit, you found your dream home and you’ve been accepted for a mortgage (it’s happennniiiiiing 💰🎊🏠🍾)
Here's what happens if the house you're buying ticks all the Lifetime ISA boxes, aka: it's £450k or under, it's in the UK, and it's for you to live in...
At this point, we have to bundle up all that money in your Nude Lifetime ISA and send your deposit to your solicitor. Please do not withdraw the money yourself or the government will charge you a 25% early withdrawal fee. Instead, there’s an official LISA process to follow, and it goes like this…
- Tap the envelope icon in your Nude app and let us know that you’re ready to buy your first home.
- We’ll email your LISA withdrawal declaration forms - one for you to complete and one for your solicitor. Both documents should be sent back to us via your solicitor.(P.s. You can only use your LISA to buy a home if it has been open for at least 12 months).
- We’ll transfer your money to your solicitor within just 30 days of them sending us the completed withdrawal declaration forms.
- Your solicitor will have 90 days to complete the sale. If they can’t do it within 90 days, they can ask us for a 60 day extension followed by a further 30 day extension (if needed). All in all, they have a max 180 days to complete the sale.
If 180 days pass and the sale still hasn’t gone through, HMRC states that your solicitor must send your money back to your LISA and restart the withdrawal process from the beginning.
5. We’ll send your deposit to your solicitor who will then ask your bank for the mortgage funds.
6. When your solicitor receives this, they’ll send the full amount (mortgage + deposit) to the seller’s solicitor to seal the deal.
7. If the sale falls through, your solicitor will send the money back to your Nude Lifetime ISA and you can pick up where you left off.
P.s. The process we've broken down above for you is for 'eligible withdrawals' – aka what the Lifetime ISA is for: buying your first house, in the UK, for £450k or less. There is no withdrawal charge for this, and you can use all of your money (if you want!) plus all of the bonus you've earned towards it, as you've used the Lifetime ISA for the exact reason it was invented for in the first place.
But if you're withdrawing for another reason altogether, or the house you want costs more than £450k, you may have to pay the government's 25% withdrawal charge. Read up about that via the links below...