Hey all,
I’m a FTB using a LISA and looking to purchase a property.
I understand I need a residential mortgage to use the LISA bonus, but I may be in a position to repay the mortgage early via gifted funds from family.
Assuming everything is a genuine residential purchase, is there any issue with taking a mortgage product that allows early repayment without fees and then paying it off early?
I’m wondering whether this could raise any concerns with lenders or fraud markers, or if it’s simply a case of checking the mortgage terms and early repayment charges.
From MSE:
https://www.moneysavingexpert.com/savings/lifetime-isas/
"Is there a minimum mortgage amount to be able to use the LISA?
No, the only criteria is that you buy with a residential mortgage (so not buy to let). However, if you could be a cash buyer, and are just getting a mortgage to be able to use the LISA, do the maths to make sure it's worth it.
Most lenders have a minimum lending amount, often £20,000 or £25,000, so you'd need to borrow that much. You'd also need to pay for a lender's valuation and legal work when purchasing the property, and the mortgage you get may have early repayment penalties if you plan to pay off the entirety of the mortgage in the first months of it.
If you plan to do this, always ensure that the amount you get from the state bonus is more than the mortgage will add to your purchasing costs over being a cash buyer."
cheers,