Get Mortgage after your IVA

Get Mortgage after your IVA

You can get a mortgage after your IVA. However your options will depend on when the Arrangement started and whether the record is still on your credit file.

Included in this article:

Finished your IVA and want to get a mortgage? Give us a call (0800 077 6180) or complete the form below to speak to one of our experts

When is it possible to get a Mortgage after an IVA?

Your options for getting a mortgage after your IVA will depend on whether the record is still showing on your credit file. Regardless of when the Arrangement was completed (early or otherwise) the record remains for 6 years from the START DATE.

If the record is no longer on your file there are one or two high street lenders who may offer you a mortgage at competitive interest rates. However most high street lenders will not be prepared to help. It is therefore advisable to get assistance from a specialist broker.

Where your IVA is still showing on your credit file your mortgage options are very limited. A sub prime lender might consider you but only if there was a specific reason for you starting your IVA. For example if you were made redundant or suffered a period of illness.

You may now be able to get a mortgage after settling early even if the record is still on your file. However the settlement must have taken place at least 3 years ago.

Speak to a specialist mortgage broker about your mortgage options Give us a call (0800 077 6180) or complete the form below.

What will a Mortgage after your IVA cost?

The cost of a mortgage is determined by the interest rate you have to pay on the money you borrow. The rate you are offered is largely dependent on the status of your credit file.

If the record of your IVA is no longer on your file then with specialist help you should be able to get a mortgage with a High Street lender. This means the rate you will be charged is no different to anyone else. It will be a standard high street rate.

Where you are considering using a sub prime lender because the record is still on your file you must expect to be charged a much higher rate of interest. At the time of writing these types of lenders are offering rates of around 7-9% over the base rate.

To access the lowest possible mortgage interest rates you should wait until the record of your IVA has come off your credit file before applying for a mortgage.

How much will you be able to borrow?

The main factor dictating the size of mortgage you will be able to borrow is your income. Generally speaking lenders will be reluctant to offer more that 4 times your gross annual income. If you want to buy in joint names it will be 4 x the total of your joint gross incomes.

You will also need a deposit. The amount required depends on the type of mortgage lender. If the record of your IVA is no longer on your credit file a high street lender may be prepared accept a deposit of as little as 5-10% of the property value.

It is not possible to borrow as much from a sub prime lender. They are only likely to offer up to 75% of the value of the property. In other words you will need a 25% deposit.

6 or more years after the start date of your IVA you might be able to get a mortgage with a deposit of as little as 5% value of a property.

Can you get a Mortgage if you are still in your IVA?

Generally speaking it is not possible to get a mortgage for the purposes of buying a new property during an IVA. However if you are already a home owner you might be able to remortgage to settle the Arrangement early.

By remortgaging you could release equity from your current property and use this as a lump sum to pay off the IVA. However the amount you can borrow is restricted.

If you have been the Arrangement for less than 2 years you could borrow up to 75% of the value of your property. If it has been over 2 years this could increase to 85%.

The amount you will need to raise to settle an IVA early will normally have to be the equivalent of the total remaining payments less a small discount.

Your home may be repossessed if you do not keep up repayments on your Mortgage or other loans secured upon it.

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6 thoughts on “Get Mortgage after your IVA

  1. Kelly says:

    I am currently looking at moving from Warwickshire to Sheffield due to a new job offer within my sector. I have noticed there are many shared ownership 1 bed flats available in Sheffield priced under £40,000.

    I started my IVA 3 years ago but completed an early settlement last September as a full and final offer. I have family that would be happy to put a small deposit down however I would like some Advise on if I could get a mortgage in this circumstance

    1. Hi Kelly

      As far as I am aware it will be very difficult for you to get a mortgage until either the record has come off your credit file (6 years from the start date) or it is 3 years since you settled your IVA. Given you settled in Sept 18 this would mean that you are likely to have to wait until Sept 2021.

  2. Nathan says:

    If my IVA was paid off early, but still on my record as settled, could I then get a joint mortgage with my partner?

    1. Hi Nathan

      If you settle your IVA early the record that it existed still remains on your credit file for the full 6 years. The record may say the IVA has been settled. However your ability to get a mortgage (or be named on a mortgage with someone else) will remain be severely restricted until the record comes off your file altogether.

      As such in terms of getting a mortgage the benefit of settling your IVA early is that you can then put the monthly payments towards saving for a deposit. However it will give no credit score benefits.

  3. Camilla says:

    I have till dec 2021 to pay my remainding £1600 off on my iva plan and im wanting to get a mortgage, would i be able to get one quicker if i pay the lump sum of or will i still have to wait for a year after the original end of the iva (would be 5years)???

    1. Hi Camilla

      In your circumstances, settling your IVA early will not improve your chances of getting a mortgage. Even if you do settle you will not be able to get a mortgage until the record has come off your credit file. This will be 6 years from the start date of your IVA.

      The only time settling early might help is if you have only been paying into the Arrangement for a year or too. It is possible to get a mortgage 3 years after settling even if the record is still on your credit file. So if you settle in year 1 or 2 you could get a mortgage 4-5 years after the start date. However this will not help you as the record will come off your credit file in Dec 2022 anyway (approx 2.5 years from now).

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