Move House in an IVA

Move House in an IVA

It is possible to move house while you are in an IVA. However it is difficult particularly if you are already a home owner.

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Is it possible to Move House while in an IVA?

If you are making monthly payments your IVA is likely to last 5-6 years. During that time you may need to move house particularly if you get a new job in a different area.

However whether you are currently living in rented property or own your own home moving during the Arrangement is not easy. One of the main issues you face is your credit rating.

Your poor credit rating will affect your ability to rent a new property and get a mortgage to buy a home. If you are already a home owner there are additional complications if you try and sell your property.

Moving house in an IVA is possible but not easy. Generally speaking it is best not to move if you can possibly help it.

Can you move to a new Rented Property in an IVA?

The easiest way to move house during an IVA is if you are going into a rented property. Having said that there are still considerable issues you will need to overcome.

Firstly if you plan to use a letting agent you need to understand they will carry out a credit check against you. You are likely to fail this because of your credit rating. Very often the only way round this problem is if someone is willing to act as a guarantor for the rent on your behalf.

Secondly you should ideally move to a property where the rent is similar to the amount currently allowed in your living expenses budget. If the rent is higher you will struggle to maintain your IVA payments. If it is lower your IVA payments may have to increase.

Speak to your IVA Company before moving to a property with a higher rent. They may be able to help by reducing your IVA payments if the move is absolutely unavoidable.

Can you sell your House and buy a new one during an IVA?

Selling a property that you currently own so that you can move house is extremely difficult in an IVA. The main problem is that under the standard terms of the Arrangement any money made from the sale is considered a windfall.

In other words if you sell your property any equity released will have to be paid into your IVA for the benefit of your creditors. It cannot be used as a deposit for your next home.

Your IVA Company may let you keep the equity released to use as a deposit in certain circumstances. However you must agree this with them BEFORE the sale. Even then you are unlikely to be able to get a mortgage to buy a new home.

If you cannot wait to move house until your IVA has finished your only option may be to rent out your property and move into rented yourself. This would allow you to make the move that you need without having to sell or apply for a new mortgage.

Could you buy your First Home during an IVA?

Buying your first house during an IVA is virtually impossible. The issue is finding a mortgage lender who would be prepared to work with you.

Generally speaking mortgage companies are not willing to lend to people who are currently in an IVA unless the purpose of the mortgage is to release equity from a current property to settle the Arrangement early.

Even if you were able to find a lender the next issue would be getting together the required deposit. The only way you would be able to do this is if friends or a family member were prepared to lend it to you.

It is normally best to delay buying your first property until after your IVA. Once it is completed a number of lenders may then be prepared to offer you a mortgage.

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