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Can You Get a Mortgage With an IVA?

Can You Get a Mortgage With an IVA?

An IVA signifies that you and your creditors have come to a legally binding arrangement to repay debts over an agreed period.

Getting yourself into debt is nothing to be ashamed of. It’s nothing new, and you are far from being alone. Did you know, for example, that according to The Money Advice Service, an estimated 8.3 million UK citizens are over-indebted?

In today’s fast-paced life, it is difficult to stay out of debt. It seems just about everybody uses credit cards and it’s very easy for these to tempt you into further arrears. It’s how you deal with getting out of that debt which matters, and when you are in over your head; life can be tough.

Some people choose to ignore their debt until they get declared bankrupt. However, one better alternative might be an IVA.

What is an IVA?

An IVA is a legal agreement, set up by a qualified insolvency practitioner and approved by a court. It signifies that you and your creditors have come to a legally binding arrangement to repay debts over an agreed period.
Many people considering taking out an IVA worry, in particular, about how it will affect their chances of getting on the housing ladder. They fear their financial records will be sufficiently tainted, resulting in a point-blank mortgage refusal.
This isn’t entirely true. In fact, getting a mortgage after an IVA is wholly possible

Seeking out a specialist mortgage lender

Before the banking crisis, mortgage lenders were often rather more liberal in their approach to people with poor credit records. Immediately after the crisis, however, things became an awful lot tighter. This made it much more difficult to get approval. However, in more recent years, things have begun to ease up slightly, and there are now more new bad credit lenders entering the market.
Therefore, if you seek out a specialist lender, you should have better luck.
Of course, you pose a higher risk to the lender than someone with a good credit score. Due to this, any offer you might receive will likely have a higher rate of interest applied to it. You will also probably find that the amount of deposit you are asked to pay upfront will also be higher than normal. However, if your current financial circumstances indicate you can afford to keep up with the repayments, this will help with your application.

How long will an IVA remain on your credit history?

An IVA stays on a person’s credit history for six years from when the date registration took place. If your IVA is still current, things will be a little tougher, and you will likely be asked to put down a significant deposit. Higher interest rates will also probably apply to any offer you receive.
Although getting a mortgage following an IVA is possible, it can be challenging and your best way forward is to speak to a specialist mortgage broker who will be able to guide you in the right direction.
Alternatively, one of our advisors should be able to answer any questions you might have.

Get in touch with us today

If you have any questions about how an IVA will affect you, get in touch with one of our advisors today. We’ll be happy to examine your circumstances and determine whether an IVA is the best solution for you.

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