IVA MORTGAGE

With the right lender, on day one of discharge.

This all depends on how historic the IVA is, the deposit required will range from 10% – 30%.

An IVA (individual voluntary arrangement) is a contract reached between a debtor and their creditors to avoid bankruptcy and to formalise debt repayments.

An IVA enables you to negotiate with the companies you owe money to and freeze the interest you are paying. This also possibly reduces the amount you owe to one that is affordable to repay monthly (assuming you are unable to pay off your debts in full).

When starting an IVA, an Insolvency Practitioner (IP) is appointed. They are a qualified Debt Consultant who will ascertain your financial circumstances and put a proposal together to all your creditors based on what they assess are realistic and affordable monthly repayments.

If your creditors accept the IVA, you will pay them monthly until the loan is paid off. Typically, this lasts for five to six years. If creditors believe that the IVA will return them more of the debt than selling it to a collection agency or choosing the formal alternative of bankruptcy, they are more likely to approve it.

If you have had an IVA in the past, this will reduce your mortgage chances, but read on to learn how ams: may be able to help.

We certainly can, although the way we achieve this is different if the IVA is active compared to if the IVA has already been settled.

During your IVA

There will be limits on any property you possess for the term of your IVA. Without the approval of your IVA Practitioner, you will not be able to sell it or refinance it. Your IVA provider should have included all the information on what will happen to your property in their original IVA proposal, which you will have agreed to and signed off.

Because mortgage interest rates are typically lower than those of personal or secured loans, remortgaging is frequently a good choice to acquire money for debt consolidation.

While an IVA is in effect, obtaining a mortgage is always difficult. However, where you have sufficient equity in your house and can demonstrate that your financial situation has improved since your IVA commenced, your chances will have improved.

At ams: we work with a variety of specialised lenders who are familiar with IVAs and who evaluate your personal finances more broadly and flexibly than high street lenders. This is particularly the case in areas where circumstances have altered more recently. They might be willing to give you an IVA remortgage even if your IVA is still in effect or a refinance so you can pay off the debt and remove the negative entry from your credit report.

After your IVA is settled

Even if it does not appear on your credit report, lenders may still inquire whether you have previously entered into an IVA. If they do, it is important to be truthful in your response, or you may be denied the loan, or supplying the wrong information can cause future problems.

We know that getting a mortgage after an IVA is difficult. Many lenders refuse to provide a loan to anyone who has gone through an IVA, regardless of how long it has been since it was finalised. On the other hand, certain lenders may consider an application after a certain period, such as three years. Fortunately, here at ams: we have access to lenders who are more willing to provide a loan if the IVA has been settled. Our professional mortgage advisers at ams: will assist you in finding the loan that suits your needs.

Yes, applicants must declare an IVA on a mortgage application. The lender will consider the applicant's credit history and any current debt management plans, such as an IVA, to assess their suitability for an IVA mortgage.

If the IVA is not present on your credit report anymore, you should still inform them in the event they inquire, as failing to do so could result in future problems.

Yes, your IVA will appear on your credit report for six years from the date it was approved. Although the IVA may be completed earlier, it will remain on your report and be marked as 'complete'. Additionally, any debts included in the IVA may be recorded as individual entries.

Lenders (particularly high street lenders) will be more cautious when it comes to granting a mortgage to someone who is financially linked to someone with an IVA. Additionally, the IVA may impact your partner's credit score, which could make it harder to get approved for a mortgage. It is important to speak with a lender to determine what options are available.

Occasionally, it may be possible for your IVA settled early with the help of a third party, such as a family member or friend, who may give you a 'gift' of money to do so. This is attractive to your creditors, as it is not considered a new asset in your IVA. This means you could apply for an IVA mortgage or IVA remortgage with better prospects as your IVA is now settled.

In these types of circumstances, we advise you to call our team, they will let you know your options based on an understanding of your circumstances.