Completed an IVA? Getting a mortgage to buy a new home or release equity from your current property is now possible.
- Can you get a Mortgage after an IVA?
- How much could you borrow?
- What rate of interest will you have to pay?
- Get help from a specialist broker
Want to get a mortgage after your IVA? Give us a call (0800 077 6180) or complete the form below to speak to one of our experts
Can you get a Mortgage after an IVA?
It is possible to get a mortgage after you have completed your IVA. Whether the Arrangement is still showing on your credit file or it has already disappeared there are options available.
Various mortgage lenders will consider you for a range of different mortgage requirements. You may be thinking about buying a new property or perhaps you want to buy your first home.
You may simply want to remortgage your existing property. This could be out of necessity because your current mortgage is coming to the end or you want to release equity for home improvements or other expenditures.
Once your IVA is completed it is possible to get a mortgage to buy a new property or release equity from your current home.
How much could you borrow once you have completed an IVA?
There are two factors which will determine how much you will be able to borrow. The first is the amount you earn. Generally speaking you can borrow up to a maximum of 4 times your gross annual income.
The second is the length of time since you started your IVA. This will affect the amount of deposit you will have to put down. If your Arrangement started less than 3 years ago you will need a deposit of at least 30-40%.
If you are looking to buy 3-6 years after the start date of your IVA the depost will need to be at least 25%. The amount required only falls significantly (to 10% or less) after 6 years from the start date. This is because the record of the Arrangement comes off your credit file after this time.
A key factor in getting a mortgage after an IVA is the length of time since the Arrangement started.
What Rate of Interest will you have to pay on a Mortgage after an IVA?
The rate of interest you will be charged on any mortgage after an IVA will depend on the lender you use. This will vary depending on how long it is from the start date of the Arrangement when you apply.
If you apply any time within 6 years from the start date you will normally have to use a Sub Prime lender. These companies lend to people with a poor credit histories. However they charge higher interest rates. You will normally be looking at at least 7-8% over base.
Where you are able to wait 6 years or more from the start date there may be a High Street Lender who will work with you. If so the rate of interest charged will fall considerable (perhaps to as low as 3%).
If you apply for a mortgage after 6 years from the start date of your IVA it may be possible to get a mortgage from a High Street lender. However you will still need the help of a specialist broker.
Get help from a specialist Mortgage Broker
If you are considering applying for a mortgage after an IVA it is best get help from a specialist broker. They will understand your situation and be able to match you to an appropriate lender.
Where you are applying within 6 years from the start date you will almost certainly need a Sub Prime lender. Generally speaking the only way you can make an application to such lenders is through a broker.
Even 6 years plus from the start date many High Street lenders will still reject your application when they learn of your IVA. A broker will be able to identify the High Street lenders who can help and advise on the best way to complete your application so that it is accepted.
Using a specialist broker will mean that you have to pay a broker fee. Generally this will be between £800 – £1500 depending on the amount you borrow. The fee can be paid direct or added to the mortgage.
Once you have completed an IVA your best chance of getting a mortgage is normally to use a specialist broker. This is the case even if you apply 6 years or more after the start date.
Wilmott Turner (owner and operator of Beat My Debt) is not a mortgage broker. We will introduce you to a specialist third party.
Your home may be repossessed if you do not keep up repayments on your Mortgage or other loans secured upon it.
Arrange a call with an IVA Expert
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