Can I get a mortgage with an IVA?
espite a recent tightening of mortgage lending criteria, it’s still possible to obtain a mortgage or remortgage if you have had an Individual Voluntary Arrangement (IVA) in the past. Or even whilst you are still going through your IVA.
Many lenders, especially the mainstream ones, will not be interested in lending to anyone with an IVA, either current or historical. The good news is, there’s currently a small number of specialist IVA mortgage providers who will. For those borrowers who satisfy the lenders requirements, you can even remortgage to pay off your IVA.
Eligibility Criteria for iVA Mortgages
Whilst eligibility criteria varies enormously from one lender to the next, the most common factors are your deposit, overall credit history, income and affordability and whether you’ve maintained a good payment record since your IVA started.
Some providers will lend if your IVA is not completed yet, though they may only consider remortgages to pay off the IVA itself. They’ll also want to see documentation showing:
- The length of time the IVA has been running for
- Whether all payments to your IVA creditors have been made on time
- The details of the Individual Voluntary Arrangement
- Your IVA annual reports
- A positive reference from your IVA insolvency practioner.
After completion, you should find more options become available to you, dependent on factors like:
- How long ago your IVA was completed
- If your IVA is still listed on your credit file
- Your credit history since your IVA was settled.
In short, each IVA mortgage lender will have their own position. Currently we have lenders who will provide mortgages if your IVA was satisfied at least 3 years ago. Others will want the IVA wiped from the borrower’s credit file completely (which takes six years from the IVA approval date) before considering a mortgage application.
Regardless of your situation, bear in mind that all mortgage providers will consider someone with an IVA on their record as higher credit risk and will price the mortgage accordingly.
So expect to pay more both for the arrangement fees and your initial interest rate. However, you may be able to move to a lower interest rate after a year or so, once you’ve established a good payment history.
Download your Credit Reports First
Before making your application, it’s vital you check your credit report from all three of the main credit reference agencies, Experian, Equifax and Call Credit. Do this before you do anything else.
Why all three?
Because not all missed payments are reported to every credit agency. So each report could look different and you might end up being lulled into a false sense of security if you only download a report from one of them.
It’s also important for the advisors we work with to have as full a picture of your situation as possible before they try to place you with a lender.
If you’ve successfully completed your IVA, you should also have received a Completion Certificate. Keep this handy as you may need to provide it as proof. The Involvency Service register will also remove your entry, but this can take up to 3 months from completion.
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