Written by: Danny Belton - Head of Lending
Can you still secure a mortgage and achieve your homeowner goals? While it won't be a straightforward path, here's what you need to know.
Mortgages with an active IVA
Unfortunately, getting a mortgage while actively under an individual voluntary arrangement (IVA) can be an uphill battle. Most lenders consider IVAs a significant credit risk due to ongoing debt commitments. However, a handful of specialist lenders cater to this specific situation. Though there are options out there, be prepared for:
Limited flexibility
Fewer lenders translate means less competition, potentially leading to higher interest rates and stricter borrowing terms
Thorough affordability checks
Lenders will assess your income, expenses, and remaining IVA contributions with a fine-toothed comb to ensure you can make repayments.
A strong financial track record is crucial here. On-time IVA payments and responsible financial management during the IVA period is crucial, and lenders will look more favourably on this.
Mortgages after an IVA
Once your IVA concludes successfully, your chances of getting a mortgage should significantly improve. However, the road to homeownership still requires strategic planning:
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Wait for the IVA to disappear from your credit report. This should happen around six years after completion
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This involves responsible credit management and repaying debts and bills on time
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While mainstream lenders become more accessible with better credit, specialist mortgage providers might still offer more competitive rates due to their expertise and manual underwriting of loans.
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A larger deposit demonstrates financial stability and boosts your eligibility for better mortgage deals.
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Remember, navigating the mortgage marketplace with an IVA needs patience and careful planning. Understanding the hurdles, taking the necessary steps to better your financial situation, and getting professional advice can help you realise your dream of becoming a homeowner.
Speak to one of our expert advisers to determine whether you’d be able to secure a mortgage following, or during, an IVA.
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
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