Is there a limit on how many Lifetime ISA's can be used for a deposit on new house?
24 November 2021
Question by Steven
Can 3 first time buyers with LISAs buy a house together i.e. is there a limit on how many Lifetime ISA's can be used for a deposit on new house?
Answered by Claire Sweet
Yes, 3 buyers with lifetime ISAs can club together to buy a house - but there are some things to consider here.
1. Many mortgage lenders will not allow more than 2 applicants, which means your choice of lenders may be more limited (which in turn may affect the amount you can borrow or the rate you pay) as you won't have access to all lenders and all rates.
2. You'll need to consider how you'll own the property as tenants in common with equal shares, or in different proportions depending on who puts in how much deposit, and whether you pay an equal share of the mortgage payment.
3. You'll need to decide how you'll buy each other out if someone wants to come off the mortgage (e.g. to buy a house with a new partner) or what happens if someone dies, loses their job or becomes ill. Plus what the eventual plan for the property is at the end of the mortgage term.
4. You'll all have your credit reports linked together, which could cause a problem if one person defaults on a payment further down the line or has an unpaid parking ticket which progresses to become a ccj.
Certainly it is something that CAN happen, but just make sure that you've worked through all the what ifs first, and ideally get an agreement in writing so that everyone understands what the expectations are.
Hope this helps