Are you ready to look for a mortgage but worried about having an IVA on your profile? It’s key to think about whether it will affect your chances of getting accepted.
Ultimately, an IVA shouldn’t stop you from getting a mortgage. It may impact the types of mortgages you’re eligible for and who you can go to, but it also heavily depends on your current financial situation, so there’s lots to take into account.
This article will look into the details of how an IVA can affect your chances and what you can do to improve your chances of getting an IVA mortgage.
What is an IVA?
An Individual Voluntary Arrangement (IVA) is a legal agreement between a creditor and a debtor, arranging how to pay back a debt.
For an IVA to become legally binding, it needs to be approved by a court. Insolvency practitioners like solicitors or accountants will usually need to be involved in arranging the IVA.
Your financial history will need to be looked at; this will allow the practitioner to assess what you can afford to create a suitable payment plan. The creditor will also have a say in what they want from the IVA and will either accept or reject the plans proposed by the practitioner.
You can be in an IVA for around five years, but this will depend on how much you can afford to pay. No matter when you pay it off, like all credit it will show on your profile for six years.
Once your creditor has agreed to the IVA, they will no longer be able to demand payments from you. This is because you have agreed to pay a certain amount per month. When the IVA has ended, you are no longer in debt to your creditors.
Can I Still Get a Mortgage After an IVA?
Getting a mortgage after being in an IVA is still possible. However, it won’t be as simple as it would be if you had a clear credit history.
Lenders like high street banks won’t usually accept applicants who have a bad credit history, including having an IVA on your profile, so you’ll need to speak with a specialist lender. But this gives you a better chance. They have the experience and contacts to help steer you in the right direction.
An IVA will stay on your credit profile for six years, even if you pay it off before then. This is the same with any other type of bad credit.
That means that for those six years, it will always show to lenders when they check your credit. So if you’re looking for a mortgage within six years of an IVA, it’s likely that you won’t be eligible for mortgages with lower interest rates. This is because lenders will see you as more of a risk than those with a clean credit profile.
What About Whilst I’m in an IVA?
If you are still paying off an IVA but you’d like to get a mortgage, it’s not impossible.
It will ultimately come down to your financial circumstances, and if you can prove that you’re financially able to pay off your mortgage whilst still paying off your IVA, there should be no reason why you can’t get a mortgage.
An advisor will be able to look into your finances to see if you’re likely to get accepted for an IVA mortgage.
Can a Specialist Mortgage Advisor Help?
A specialist mortgage broker is advised for those with an IVA on their profile. Traditional mortgage brokers won’t have the same experience, knowledge and contacts as specialist mortgage brokers, and therefore won’t be able to provide the necessary advice.
You’re much more likely to get accepted for a mortgage when using a specialist advisor, no matter what type of bad credit you have on your profile.
Improving Your Chances
To give yourself the best chance of getting a mortgage with an IVA on your profile is speaking to a specialist advisor. They will be able to look into your personal circumstances to assess your individual needs.
You can give yourself the best chance of getting accepted by making sure your mortgage application is correct and everything is filled out. But getting a mortgage broker with experience in bad credit and IVA mortgages will give you the best chance.