Getting A Mortgage After An IVA

We’ll explain how to get a mortgage after an IVA (Individual Voluntary Arrangement), which mortgage lenders will consider your application, and why a specialist broker is a must.

What is an IVA?

An Individual Voluntary Agreement (IVA) is a form of bad credit, which is an arrangement between a debtor and a creditor where money owed is paid back over a set period.

The agreement is set up by an insolvency practitioner and sanctioned by a court, meaning that both parties must stick to it.

Can you get a mortgage after an IVA?

Yes, but the IVA will almost certainly need to be satisfied and your options will be limited depending on how recent it was.

Mortgage Lenders view IVAs as one of the most serious forms of bad credit and will see you as very high risk. The same information applies if you are also looking to remortgage

You’ll likely be expected to pay higher interest rates and be asked to put down a higher deposit to reduce this risk.

What if your IVA is still active?

It is unlikely you’ll get a mortgage but it’s always good to explore your options and go through them with a bad credit mortgage expert.

Keep in mind that if you did want to proceed while your IVA was active then you’d need to follow the conditions attached to the agreement, which would mean making a request to your insolvency practitioner or IVA provider.

It would be up to them to consider your circumstances and decide whether or not they will grant you permission to apply for a mortgage.

In most cases, a lender will require you to settle the IVA first before agreeing to a mortgage. Remortgaging to resolve credit issues is quite common and there are lenders who will also consider this.

How to get a mortgage after an IVA

Your first step should be to find a mortgage broker who specialises in this type of bad credit. Make an enquiry with us and we will match you with an advisor whose area of expertise is borrowers with IVAs.

Your bad credit mortgage specialist will guide you through the following steps to full application:

• Downloading your credit reports: Your broker can help you do this via our credit reports hub and suggest ways to improve and optimise them ahead of your application.
• Completing all of the paperwork: The right mortgage advisor can shave time off the application process by giving you a hand with all of the paperwork.
• Finding the right mortgage lender: This is key to securing the best rate. The advisors we work with have deep working relationships with mortgage lenders who specialise in IVAs and often have access to exclusive deals.

When should you apply?

If your IVA is satisfied, the longer you wait, the better. Ideally, your IVA will have passed the 6-year mark from registration which means it no longer shows on your credit file.

A lot of lenders will require the issue to have been satisfied for over 6 years, so if you can wait until then you’ll give yourself a lot more options. A lot, but not all.

The table below illustrates how many lenders could be available based on the amount of time that has passed since your IVA was satisfied.

Be aware of the difference between the length of time since your IVA was registered and the time since it was satisfied, as lenders may work to different measures. Most IVAs last for 5 years, so if for example it’s been 7 years since your IVA was set up, it may only be 2 years since it has been discharged.

It’s not impossible to get a mortgage with a more recent one, but it just means your pool of potential lenders will be much more limited and terms will be less competitive, likely making your mortgage more expensive. Your mortgage broker will be able to find the right lenders based on how long ago your IVA was settled or registered.

What else do lenders look at when assessing your application?

As well as looking at your employment, affordability, income levels and other financial commitments, lenders will likely have specific lending criteria related to your bad credit. Aside from the length of time since your IVA, which we’ve discussed above, the key criteria that will be impacted will be deposit requirements and other credit history.

Credit record since the IVA

Lenders will often look at an applicant’s broader credit history to assess how they have managed their finances since. This can also form part of their eligibility criteria and can impact other terms such as deposit requirements.

Deposit

Potentially, you’ll need as much as a 30% deposit depending on the age and status of your IVA.

It will depend though on your IVA status, as illustrated below:

The difficulty here is that having bad credit  might  have made it very difficult to build up significant savings, so you may need to wait a while after discharge to be able to safe.

Which mortgage lenders will consider your application?

Take a look at our rates table below to get an idea of which lenders cater for borrowers with bad credit, such as IVAs.

The rates quoted above were correct at the time of writing and are subject to change at any time at the lender’s discretion. Speaking to a mortgage broker is the best way to keep track of the rates available at any given time. 

Can you remortgage after an IVA?

Yes, just as there are options for getting a new mortgage after an IVA, you should be able to remortgage too. This depends on how long it has been since your debts were discharged, plus your personal financial circumstances and how much equity you have in your property.

Our guide on how to remortgage with bad credit is a good starting point to help you understand the process and think about what you might be able to afford.

Get matched with a specialist bad credit mortgage broker

Your first step if you’re thinking about applying for a mortgage after an IVA should be to find a mortgage broker who has expertise in bad credit mortgages. They will have experience in securing loans for people in your situation, relationships with specialist lenders, and will know exactly what support and guidance you’ll need through the process.

Give us a call now on 0808 189 2301 or make a quick online enquiry and we’ll look at your circumstances, assess your specific needs and match you with the broker who is best placed to help you get the mortgage you need.