If you’re currently in a Debt Management Plan (DMP) or an Individual Voluntary Arrangement (IVA) and wondering whether you can still achieve homeownership or remortgage with bad credit, the short answer is: yes it’s possible, but it can be more challenging.
Specialist mortgage lenders will closely review your financial history, but with the right approach and preparation, getting a mortgage after a DMP or IVA is within reach.
What Are a DMP and an IVA?
Debt Management Plan (DMP):
An informal agreement between you and your creditors to pay off debts at an affordable monthly rate. DMPs are usually flexible and not legally binding.
Individual Voluntary Arrangement (IVA):
A formal, legally binding agreement to pay back debts over a set period (usually five to six years). An IVA is a more serious arrangement and remains on your credit file for six years from the start date.
Can I Get a Mortgage While Still in a DMP or IVA?
While a DMP Is Active:
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Some specialist mortgage lenders may offer you a mortgage with a DMP if you have consistently maintained your payments.
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You may need a larger deposit (typically 15–30%), though some lenders might accept as little as 5% depending on your credit profile.
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Be prepared for potentially higher interest rates compared to standard mortgage deals.
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Mainstream mortgage lenders are less likely to approve your application
Key factors lenders consider:
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How long you’ve been in the DMP
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Your payment history and consistency
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Your current credit report and score
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Your overall affordability (income vs outgoings)
While an IVA Is Active:
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Getting a mortgage during an IVA is more complex but not impossible.
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Many lenders require you to have completed your IVA; however, some specialist bad credit mortgage lenders will consider applicants still within an active IVA.
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You will likely need written permission from your IVA supervisor to apply for a mortgage.
What Happens After Completing a DMP or IVA?
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After completing a DMP or IVA, and especially once one or two years have passed, your chances of securing a mortgage after adverse credit greatly improve.
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As your credit score rebuilds, you’ll have access to more lenders and better mortgage rates.
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A larger deposit will always strengthen your application.
Tips to Improve Your Mortgage Chances
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Save the largest deposit possible. A bigger deposit reduces the lender’s risk.
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Rebuild your credit score by paying bills on time and managing debts responsibly.
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Regularly check your credit file* to ensure accuracy and fix any mistakes.
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Work with a specialist mortgage broker experienced in DMP and IVA cases.
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Be ready to explain your financial journey showing how you’ve rebuilt your finances can positively influence lender decisions.
Frequently Asked Questions (FAQs)
Can I get a mortgage with an active IVA?
Yes, but it’s more challenging. Some specialist lenders will consider your application even if your IVA is still active, provided you meet their criteria, such as maintaining regular payments and demonstrating affordability.
How soon after a DMP can I apply for a mortgage?
You can apply immediately after completing a DMP, but waiting 12–24 months can significantly improve your chances of securing better mortgage deals with lower interest rates.
Do I need a bigger deposit with a DMP or IVA?
Most lenders will require a larger deposit typically between 15%–30% although some specialist lenders may accept a 5% deposit depending on your individual credit circumstances.
Final Thoughts
While being in a DMP or IVA can make getting a mortgage trickier, it’s not impossible especially with specialist help and good preparation.
If you’re not quite ready yet, don’t worry focus on building financial stability now, and you’ll put yourself in a much stronger position when the time is right.
Remember: Every lender has different criteria. Some will say no, but the right one might say yes and working with a knowledgeable mortgage broker can make all the difference.
Speak to a Specialist Today
Ready to explore your mortgage options? Speak to one of our specialist mortgage brokers today for expert advice tailored to your situation.
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