Martin Lewis Last Minute Warning For First Time Buyers
And not only that, with one of the schemes, the Help to Buy ISA, Consumer expert Martin Lewis has recently stressed you only have days left to sign up for it before it's no longer on offer - so you better hurry!
Martin, who returned to our TV screens on Monday evening (25th November) on the ITV Money Show, pointed out the deadline to viewers and those visiting him on the roadshow.
He told first time buyers that on 30th November, the Help to Buy ISA will no longer be available, which means you literally will be missing out on free money. And he is the MoneySavingExpert founder, so he knows his stuff.
He said on the TV show: "This is an urgent warning for savers and time buyers - miss this and you could be missing out on thousands of pounds worth of free cash," he explained on the Martin Lewis Money show.
"The Help to Buy ISA was launched four years ago to help first time buyers hoping to buy a property. It's been a hot topic on our roadshow ever since.
"But the time is ticking on one," he added.
"The big perk of the Help to Buy ISA is that the Government will give you 25% on top for a mortgage deposit if you're going to buy a house in the near future.
This specific savings ISA for first time buyers only will provide you with 25% interest and is ideal for those aged 16 or over planning to purchase a home soon up to the value of £250,000 (or £450,000 in London).
There are limitations though, with savers only allowed to contribute up to £1,200 when they first open the account and thereafter maximum deposits of £200 are allowed monthly.
The maximum you are allowed to input in total too is £12,000, meaning you could land yourself £3,000 extra on top from the government. Don't mind if we do!
You can buy a property within three months of opening the ISA without incurring penalties, but you won't see the cash in your account - your solicitor will need to apply for the funds on completion - so the extra money is to be used towards your mortgage rather than a deposit.
But if you change your mind or manage to buy a house another way, you can withdraw your savings at any time - you just won't be rewarded at the end.
Martin said: "The best bit is if you don't buy a house, you don't lose anything."
So if you think this is suitable for you, you really do need to hurry, as from 30th November, only those with existing Help to Buy ISAs will continue to reap rewards.
One woman on Martin''s Money Show explained she's now well on her way to buying her first home thanks to a huge boost on her £10,000 savings since opening the account in 2015.
Read more about the Help to Buy scheme here.
However, there is another ISA option that arrived in 2017 to consider instead, which is already in place and will replace the former scheme - there is no rush to open this one.
The Lifetime ISA (LISA) has some positives and negatives compared to Help to Buy.
This form of ISA can be opened when you are aged 18-39 and you will still receive 25% on your savings. You can actually save and gain more using this, plus the interest savings will be deposited into your account monthly, so it will be available to use as a deposit, but there are more restrictions.
Your account must be in use for a whole year before you're allowed to touch savings and if you try to access it early you will be penalised. So if you're hoping to buy a house within the next year, this is not ideal.
However, the Lifetime ISA allows you to input £4,000 within every tax year, allowing you to earn £1,000 in interest ever year, which is more generous than the Help to Buy and you can buy a house worth up to £450,000 regardless of where you buy, which again is greater.
You can also buy a house along with a second time buyer, but they cannot use their LISA towards it. So yes, even non-first time buyers can open a LISA, but they cannot use the money towards a house, instead, they have to wait until they are 60-years-old to access the cash which they can then use as an additional pension.
And the great news is you can pay into this ISA until you are 50-years-old, so in total you could reap £32,000 of benefits from the government. That's whopping amount of free cash.
Sign us up! Read more about LISA here.
Featured Image Credit: PA