Can you get a mortgage after an IVA?
If you’ve taken out an Individual Voluntary Arrangement (IVA), you may be wondering if you can still get a mortgage. The good news is that, yes, you can, but you have fewer lenders and mortgage deals to choose from at first. Your options will depend on your circumstances, such as when you completed your IVA, your recent financial history and how much deposit you have.
If you’ve recently finished your IVA, buying a home may feel a long way away. But an IVA doesn’t rule out having a mortgage in the future. Lenders will likely want to get a clearer understanding of your current financial situation and how you’ve managed your finances since.
How long after an IVA can you get a mortgage?
There isn’t a set amount of time you have to wait after completing an IVA before applying for a mortgage. Each lender has its own criteria, meaning that some may consider applications sooner than others.
An IVA will usually stay on your credit file for six years from the date it started, so even if you finish early, it will remain on your file for the same period. Once those six years have passed, it should be taken off your credit file. At this point, you may find you have a wider choice of lenders, provided you meet all of their criteria.
What do mortgage lenders look for after an IVA?
Mortgage lenders will want to get a clear view of your current financial situation. Things they may consider include:
- When your IVA was completed
- What your credit history looks like now
- How much you earn and spend each month
- Whether you have other debts to repay
- The deposit you have saved
How can you improve your chances of getting a mortgage after an IVA?
Before you begin applying for a mortgage, there are a few practical steps you can take to improve your chances. First, check your credit reports with Experian, Equifax, and TransUnion to ensure the IVA is showing as completed.
You’ll also be able to see your credit score, which can give you a good indication of your credit health, and most lenders will ask to see evidence of this when you apply. One of the biggest factors affecting your score is paying bills and making debt repayments on time.
Stay on top of these payments to help keep your credit file healthy, and avoid applying for several forms of credit close together. If you have credit cards, try to pay them off to increase your headroom and improve your affordability calculations.
Another area that can help your chances of getting a mortgage is the size of your deposit. Many mortgages require at least 5% to 10%, although you may need more if you’ve previously had an IVA. A larger deposit means you’ll need to borrow less and could give you access to a wider choice of mortgage deals and better interest rates.
Get advice about an IVA
Considering an IVA? Before making a decision, it’s important to understand what it could mean for your finances – both now and in the years ahead. The right advice can help you feel more confident about your options and what comes next.
Speak to Bridge Newland for straightforward, practical advice tailored to your circumstances, with no-nonsense guidance to help you make an informed decision.
Categorised in: Latest Insolvency News