Mortgage after an IVA

In our ultimate guide in getting a mortgage after an IVA, we discuss how to get a mortgage and the best way to achieve this and all aspects of an IVA.

It is still possible to take out a mortgage if you’ve been in an Individual Voluntary Arrangement (IVA). At Clever Mortgages, we can help by reviewing your existing mortgage once your IVA has ended.

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Can you get a mortgage after an IVA?
YES! there are mortgages available even if you’ve been in an IVA

It is still possible to take out a mortgage if you’ve been in an Individual Voluntary Arrangement (IVA). At Clever Mortgages, we can help by reviewing your existing mortgage once your IVA has ended – or finding suitable first-time-buyer mortgages to help you onto the property ladder.

Speak to a mortgage broker now

There is so much jargon when it comes to mortgages.

Our mortgage advisors are experienced in all types of mortgages and can explain everything to you in a simple and easy to understand manner. We will also do the mortgage application for you! For a free no obligation phone call to discuss your situation, call 0800 197 0504 or complete the pre qualify

April Angeloni

Mortgage advisor

Mortgage after an IVA FAQ​

An Individual Voluntary Arrangement (IVA) is a legal agreement between an individual and their creditors to pay off their unsecured debts over a fixed period of time. If you’re in an IVA, it is more difficult to get a mortgage because you’re considered a higher risk borrower by lenders.

There are a few options that you may have:

  • If you are looking to buy a property you would need to have at least a 30% deposit and more than likely have to pay off your IVA.
  • If you are looking to remortgage your current property, you’d again need at least 30% equity in your property and may have to pay off your IVA.
  • If your current mortgage product is coming to its end and you need a new fixed or variable rate, a product transfer with the same lender should be available to you, often without a credit check.
  • If you are over 55 years of age, then Equity Release options are available.

Clever Mortgages can help talk you through all the above options and help answer your questions.

If you are able to proceed, you’ll need to find a lender who is willing to consider your application. High street banks are unlikely to approve your application, so you’ll need a specialist mortgage lender who may be more flexible and willing to consider your application. It’s also important to be aware that you’re likely to have to pay a higher interest rate than someone who isn’t in an IVA, and you may need a larger deposit.

You should also speak to your IVA Supervisor before deciding whether or not to apply for a mortgage.

Ultimately, getting a mortgage while in an IVA is a complex process, and it’s important to seek professional advice from a mortgage broker who has experience in dealing with customers who are in IVAs.

If you’re wanting to remortgage in order to release equity to settle your IVA, there is a chance that your insolvency practitioner will approve, especially if it lowers your current monthly expenditures so you can pay more towards your IVA or pay it off in full with the money acquired through remortgaging. Your IVA will probably have negatively impacted your credit score, so it’s likely you’ll have to go through a specialist lender to remortgage.

Luckily, our expert brokers at Clever Mortgages have access to 8 of these specialist lenders and a wealth of experience helping people in an IVA remortgage. If you’re in an IVA and want to remortgage, get in touch with one of our expert advisors.

You can get a mortgage after an IVA (Individual Voluntary Arrangement) but your choices may be more limited depending on the amount of time you have been out of the voluntary arrangement. Clever Mortgages are specialist mortgage brokers with a wealth of experience in helping to source an adverse credit mortgage after an IVA has completed.

8 mortgage lenders after an IVA

Your IVA will have had an impact on your credit score, and this can make it harder to get a mortgage. However, your credit score will gradually improve over time as long as you continue to make all your payments on time and in full.

If you would prefer to speak to an Expert IVA Mortgage Adviser now, then please call us on 0800 197 0620 for mortgage advice.

Yes, an Individual Voluntary Arrangement (IVA) can affect your ability to get a mortgage, as it is an indicator of past financial difficulties and may impact your credit score and overall creditworthiness.

Having an IVA on your credit file will make it more difficult to obtain a mortgage, as it suggests to lenders that you have had difficulty managing debt in the past. Some lenders won’t offer you a mortgage at all, others will consider it but will require a large deposit and additional information or documentation to support your application.

 

That being said, it is still possible to obtain a mortgage after completing an IVA. The length of time since the IVA was completed, your credit score, your income and employment status, and other factors will all be taken into consideration when lenders review your application.

To increase your chances of being approved for a mortgage after an IVA, it is important to take steps to improve your credit score, such as paying all bills and debts on time, reducing your credit utilisation, and checking your credit report regularly to ensure that it is accurate. Working with a mortgage broker or financial advisor who specialises in helping people with past credit problems can also be helpful in finding lenders who are more willing to consider your application.

If you’re in an Individual Voluntary Arrangement (IVA), it can have an impact on your mortgage application. Here are some factors to consider:

    Affordability: Mortgage lenders will want to know that you can afford the mortgage repayments, as well as your ongoing IVA payments (if they allow the IVA to remain). They will assess your income and outgoings to determine if they are happy to lend to you.

    Deposit: You will need a larger deposit if you’re in an IVA, as lenders may consider you a higher risk borrower.

    Interest rates: If you’re in an IVA, you may have to pay a higher interest rate on your mortgage than someone who isn’t in an IVA. This is because you’re considered a higher risk borrower.

    Permission: You should also speak to your IVA Supervisor before deciding whether or not to apply for a mortgage.

    Credit score: Your credit score will have been affected by your IVA, and this can impact your ability to get a mortgage. You may need to work on improving your credit score before applying for a mortgage.

Overall, it’s important to seek professional advice from a mortgage broker who has experience in dealing with customers who are in IVAs. They will be able to assess your individual circumstances and help you find a lender who is willing to consider your application.

6 years after an IVA is registered the mark on your credit file should have come off and you should have received your completion certificate from your insolvency practitioner. This is worth checking on your credit file and also on the Insolvency Register.

Even with your credit file no longer showing an IVA it will have affected your credit rating and it can be difficult to get mainstream lenders to view your remortgage or mortgage application favorable. Luckily, there are often lenders who may provide a mortgage after an IVA. These specialist lenders are often referred to as “adverse mortgage lenders”.

Adverse mortgage lenders are found and assisted by master brokers like Clever Mortgages, who help gather information and give the required advice so you can make an informed decision.

The process of finding and applying for a mortgage after an IVA is the same as most other applications, requiring documentation and an affordability assessment. All of which Clever Mortgages can assist you with.

An Individual Voluntary Arrangement (IVA) is a legally binding agreement between you and your creditors to repay your debts over a set period of time. After completing an IVA, it is possible to obtain a mortgage, but there are several factors that can affect your eligibility.

Factors that will be considered:
Time since IVA finished – The amount of time that has passed since the completion of the IVA – Many lenders require you to wait for a certain period of time, usually 3-6 years, before they will consider you for a mortgage. However, there are some lenders that will consider your application immediately as long as you have a sufficient deposit.

Your credit score – Your credit score will be a key factor in determining your eligibility for a mortgage. If your credit score has improved since completing the IVA, this may increase your chances of being approved for a mortgage.

Your income and financial stability – Lenders will also consider your income and financial stability when determining whether to approve you for a mortgage. It is important to have a stable source of income and a well-managed budget.

In summary, while it is possible to obtain a mortgage after completing an IVA, the length of time you will need to wait and your eligibility will depend on a variety of factors. It is important to work with a mortgage broker who can help you navigate the process and find the best mortgage option for your individual circumstances.

If you are applying for a mortgage jointly with your partner, their Individual Voluntary Arrangement (IVA) will affect your ability to obtain a mortgage. Lenders will review both of your credit histories and financial information when making lending decisions, so your partner’s IVA will likely be taken into account.

Having a partner with an IVA may impact your ability to obtain a mortgage in several ways. For example, some lenders may be hesitant to approve a joint mortgage if one of the applicants has had past financial difficulties, such as an IVA. They may require a larger deposit or charge higher interest rates to offset the perceived risk of lending to someone with an IVA.

That being said, there are still lenders who may be willing to consider your application even if your partner has had an IVA. Factors such as your credit score, income, and employment status will also be taken into account when making lending decisions. Working with a mortgage broker who specialises in helping people with past credit problems can be helpful in finding lenders who are more willing to consider your application.

It is important to note that if you are applying for a joint mortgage, both you and your partner will be jointly responsible for repaying the mortgage, regardless of who has the IVA. It is important to carefully consider your financial situation and ability to make mortgage payments before applying for a joint mortgage.

If you are applying for a joint mortgage with someone and you have an Individual Voluntary Arrangement (IVA), it can affect the application process and the lender’s decision.

When you apply for a joint mortgage, the lender will assess both of your financial situations, credit histories, and credit scores to determine your eligibility for a mortgage. If one of the applicants has an IVA, it can impact your ability to secure a mortgage. This is because an IVA is seen as a negative factor that indicates a history of financial difficulties and can suggest an increased level of risk to the lender.

In some cases, the lender may require that the applicant with the IVA must wait until it has been fully completed and removed from their credit record before they can be considered for a joint mortgage. Alternatively, the lender may offer the mortgage but require a larger deposit or charge a higher interest rate to offset the perceived risk of lending to someone with an IVA.

It’s also important to note that when you apply for a joint mortgage, both applicants will be jointly responsible for repaying the mortgage, regardless of who has the IVA. This means that if one of the applicants is unable to make the mortgage payments, the other applicant will be responsible for covering the full amount.

If you are applying for a joint mortgage with someone who has an IVA, it’s important to work with a mortgage broker who can help you navigate the process and find a lender who is willing to consider your application. It’s also important to carefully consider your financial situation and ability to make mortgage payments before applying for a joint mortgage.

Clever Mortgages have a team of mortgage advisors who have helped many other people coming out of an IVA to make successful mortgage applications and remortgages.

The range of mortgage interest rates as of 26th March 2019 are between 1.52% to 3.63%**

Clever Mortgages were able to find a mortgage for one of our customers recently which saw him save money on mortgage fees, get a competitive 1.90% rate and get this rate fixed for 5 years *APRC representative of 3.6%

Remortgaging whilst you are in an active IVA is possible, but there are only a few specialist lenders who would consider your case. The reason for your remortgage would also determine whether or not you were able to pursue this option.

When remortgaging within an IVA there could be requirements from the lender, such as having to use released funds to settle the IVA early.

You could remortgage during the IVA to find a better rate or to fix the interest amounts but if your intention is to release equity, you would likely be expected to pay some of this into the voluntary arrangement.

These cases are certainly worth talking with Clever Mortgages about, as they are experts in remortgaging within IVA arrangements and after their completion.

Remortgaging after an IVA could be one of the first actions you take following the completion of your debt solution arrangement. The remortgage could be used to lower your payments, interest rate or to release funds for home improvements.

Overall the rates you can get will be determined by whichever lenders are available to you.

Clever Mortgages were able to consolidate the clients’ secured loan and his current mortgage into a new mortgage package. This took the clients monthly payments from £1,162 per month down to £650 saving £512 per month. *APRC representative of 3.6%

The deposit size will vary by the lenders available to you, but you may be less impacted by your completed IVA history or debt solution than you think.

Some lenders may expect larger than average deposits due to your credit rating, whereas some may only expect the standard deposit size from 5% to 10% of the property value.

Saving for the deposit can be an ordeal but you could reassign your monthly IVA payment amount into a separate account, creating a mortgage deposit savings pot.

Just because you have completed an IVA does not necessarily stop you from taking advantage of other deals such as; First Time Buyer initiatives like a 5% deposit scheme or Right to Buy schemes.

Another option is the Help-To-Buy scheme which could be an option depending on your circumstances and eligibility.

If you’ve waited for your IVA to be removed from your credit report and improved your credit score, depending on your financial situation, you might be able to get a mortgage with as little as 5% or 10% deposit through a specialist lender. (source)

The larger the deposit you manage to save after an IVA, the more chance you have of being accepted for a mortgage with better rates, this is because lenders view larger deposits as a less risky investment. If you’ve been paying an IVA for several years, you’ll be used to budgeting to pay the monthly sum, once your IVA has been settled you could use the money to save towards a deposit instead, especially if you’re seeking a mortgage fairly soon after your IVA has been completed.

To access the best rates and products after an IVA, it’s best to save up as much as possible for your deposit before applying for a mortgage, you could save as little as 5% but a 15%-25% deposit will give you a greater chance of being accepted for a mortgage with lower interest rates and better deals. As most lenders will ask you disclose previous credit agreements like an IVA, a larger deposit will help the lender view you as a less risky investment after your previous financial problems and increase the chances of a lender offering a more attractive deal. 

Your credit report will show your IVA for 6 years from the date of issue (From the start of the IVA). An IVA is an individual voluntary arrangement, meaning the term is adjusted based on your specific circumstances but usually last between 5 to 6 years, after which time you will receive a completion certificate from your insolvency practitioner.

This means that at the end or a year thereafter, the IVA will no longer be recorded as an active debt solution arrangement on your credit report. This does not mean that your credit reference will not show any debts or adverse credit like defaults or missing payments that were not included in your IVA.

Clever Mortgages are a specialist broker and can help you find a mortgage after an IVA and provide you with more information on the after effects of an IVA on a mortgage or remortgage application, including your chances of being accepted.

You can check your credit report from sites such as Experian, Noddle or Check My File which are able to give you an idea of what mortgage lenders base some of their decisions upon.

An Individual Voluntary Arrangement (IVA) will typically stay on your credit file for six years from the date it was set up, even if you have completed the IVA early. This means that the IVA will continue to be visible to lenders and other financial institutions for a period of six years after its completion.

Once the six-year period has elapsed, the IVA will be removed from your credit file, and it should no longer have an impact on your credit score. However, it is important to note that the effects of the IVA on your credit score may last longer than six years, as lenders may take your past financial history into account when making lending decisions.  On application, some lenders will ask if you have EVER been in an IVA.

You will have been added to the insolvency register and you can check the details here.

It is important to try to rebuild your credit score after completing an IVA, as this will improve your chances of being approved for credit in the future. You can do this by ensuring that you make all of your payments on time, keeping your credit utilisation low, and checking your credit report regularly to ensure that it is accurate and up to date.

Improving your credit score after completing an Individual Voluntary Arrangement (IVA) can take time, but there are several steps you can take to rebuild your credit history:

Check your credit report: Review your credit report to ensure that all of the information is accurate and up to date. If you notice any errors or discrepancies, contact the credit reference agencies or creditor to have them corrected.

Keep credit utilisation low: Lenders prefer to see that you are using credit responsibly, so it’s important to keep your credit utilisation low. Aim to use no more than 30% of your available credit limit, and pay off your balances in full each month.

Close unused accounts: If you have credit accounts that you no longer use, consider closing them. This will help to reduce the amount of available credit you have, which can improve your credit score.

Stay on top of bills and payments: Late payments can have a negative impact on your credit score, so it’s important to pay all of your bills on time. Set up automatic payments or reminders to ensure that you don’t miss any payments.

Be patient: Improving your credit score after an IVA can take time, but by following these steps consistently over time, you should start to see improvements in your credit score.

Remember, it’s important to be patient and consistent when rebuilding your credit score. It can take time to improve your credit history, but by taking proactive steps, you can demonstrate to lenders that you are a responsible borrower and improve your chances of being approved for credit in the future.

Yes, if you have previously entered into an Individual Voluntary Arrangement (IVA), you will need to declare this when applying for a mortgage. This is because lenders will conduct a credit check and review your financial history as part of the application process.

Failing to disclose a previous IVA could be considered fraud and may result in your mortgage application being declined, even if you meet all other eligibility criteria. It is always best to be honest and upfront with a mortgage broker and a lender about your financial history and any previous credit problems you may have had.

When applying for a mortgage after an IVA, it is important to work with a mortgage broker who can help you find lenders that are willing to consider applications from those with a history of financial difficulty.

Clever Mortgages would use the Noddle report of your circumstances as it includes information on both Experian and Equifax. Credit reports directly from either Experian or Equifax could miss information shown on its counterpart.

Once you have a copy of your current credit profile, please complete the enquiry form below and the Clever Mortgages team can provide you with specialist advice and help find the options available to you.

A lender may consult one or more of the credit referencing agencies to help them make a decision on whether to lend to you. This can result in them potentially seeing more information on your credit profile than you would have access to (using just one credit referencing source).

A credit reference is done by a lender or mortgage broker as a part of any mortgage or remortgage application. This search is standard and highlights any current or past outstanding debts such as unsecured debt, hire purchase and secured debts.
* APRC Representative Example Mortgage amount £170,995 (including £995 mortgage lender fee), 64 payments of £748.30 at a fixed interest rate of 2.28%, followed by 236 mortgage repayments of £889.60 at a variable rate of 4.24%. Over a term of 25 years, giving a total amount payable of £258,861 at an APRC representative of 3.6%. The contract will be secured against your property.

**Based on rates available from 3 major lenders, lending on 85% LTV for a residential purchase, gift as deposit, 25-year term, and if IVA is no longer on credit file.

How do I decide on the best route?

It is important before making a decision to consider the benefits and costs of each mortgage product.  Clever mortgages take the time to understand your requirements and future plans to ensure you receive best advice tailored to your needs.

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Case Study

Helping one customer to finance his home improvement even though he’d been in an IVA

Our customer Mr F wanted finance to carry out home improvements, but he’d previously been in an IVA. With Clever Mortgages he was able to:

Take out a new mortgage with his High Street Bank Release equity from his home Carry out much-needed home improvements Secure a fixed rate of 1.84% for two years

Mr F wanted to release some equity from his property to carry out some much-needed improvements. He already had a mortgage, but as he had been in an IVA since he took this out, he didn’t meet the criteria with his existing lender. He had also approached the lender himself but was told he wouldn’t be considered because of his IVA.

We approached the lender, explained his situation and secured a new mortgage in just three weeks. This consolidated his unsecured debt, released equity from his property and provided him with £350 cashback.

The new mortgage allowed the customer to secure a competitive rate for two years, consolidate his debt and carry out home improvements.

BalancePaymentRateProductTerm
New Mortgage£63,900£362.863.09% 2 year fixed rate20 years

Information correct at time of publishing