It is possible to get a mortgage after an IVA. If the record is no longer on your credit file and you get the right advice, some high street lenders may now work with you.
Jump to article content:
- How to get a mortgage after an IVA
- What size of deposit will you need?
- How to save for your deposit
- Should you avoid an IVA if you want to get a mortgage?
How to get a Mortgage after an IVA
The main problem with applying for a mortgage after an IVA is your poor credit rating. To overcome this, it’s almost always best to delay any application until the record has come off your credit file. This will be 6 years from the start date of your Arrangement.
At this point, there are some high street lenders who will now lend to you. However the majority of lenders will still be unwilling to help. They may say you need to wait even 2 more years.
To avoid wasting time and speaking to lenders who can’t help, it is best to use a specialist mortgage broker. Speak to use for help with this.
If you settled your IVA early more than 3 years ago but the record is still on your credit file you may now be able to get a high street mortgage.
If you want to speak to an experienced reputable mortgage broker, give us a call (0800 011 4712) or complete the form below. The advice is free and confidential.
What size of Deposit will you need?
The deposit you need for a mortgage after an IVA depends on how long it is since the Arrangement started. The longer you wait, the smaller deposit you will require.
After 6 years the record of the Arrangement will be off your credit file. At that time, the deposit you will need to have saved will be around 10% of the value of the property you are looking to buy.
If the record is still on your file, you may be able to use an adverse lender. However you will then be looking at a deposit of at least 25%.
Many high street mortgage lenders will still be unwilling to lend to you even after the IVA is off your credit file. As such using a specialist mortgage broker is recommended.
How to save a deposit after an IVA
If you are not already a home owner one of the major obstacles you face is getting together the cash for your deposit. Depending on which part of the UK you are looking to buy, you are likely to need around £20,000 – £30,000.
Unless you have friends or family who can help, the only way you are going to be able to get this money together is to save it. Now your IVA is finished, you should consider saving the amount you were paying into the Arrangement.
You have been used to paying your IVA for the last 5-6 years so all you need to do is keep saving the same amount each month. You can also save any extra money you are able to earn.
If you were paying £250 a month into your IVA you could now save this money. In three years, you will have saved nearly £10,000.
Should you avoid an IVA if you want to get a Mortgage?
With specialist advice you can get a mortgage after an IVA. As such this should not be a major concern when making your decision to use the solution or not.
You may have read or been told that if you want to get a mortgage in the future you should avoid an IVA and use an informal Debt Management Plan. This is not the case. It is unlikely to be any easier to get a mortgage after a DMP.
All debt solutions will affect on your credit rating and make getting a mortgage more difficult. Given this you should first choose the solution that best helps you to resolve your debt problem.
You can start an IVA in the knowledge that mortgage options will be available once it is completed and off your credit file.
Looking for a mortgage? Give us a call (0800 011 4712) or complete the form below. The advice is free and confidential.