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Get a Mortgage after an IVA

Apply for a Mortgage after an IVAGetting a mortgage to buy a new home or release equity may now be possible after you have completed an IVA.

Finished your IVA and want to get a mortgage? Give us a call (0800 180 8013) or complete the form below to speak to one of our experts

Can you get a Mortgage after an IVA?

You can apply for a mortgage after your IVA is completed. However whether or not you will be successful will depend largely on whether the Arrangement is still showing on your credit file.

If it is more than 6 years since your IVA started the record should be off your file. As such it may now be possible for you to get a mortgage from a normal high street lender.

However if the record is still on your file it will be more difficult. In certain circumstances a sub prime lender might consider you. However even this type of lender will be reluctant to help unless there were very specific reasons why you started your IVA.

The record of your IVA will remain on your credit file for 6 years from the start date. This is the case even if you paid off the Arrangement early.

Want to get in touch with a specialist mortgage broker? Give us a call (0800 180 8013) or complete the form below.

Should you use a specialist Mortgage Broker?

Once the record of your IVA has come off your credit file you may think it would then be relatively easy to get a mortgage. Surely high street lenders will now work with you. This is not the case.

During the application process all lenders will ask whether you have ever been in an IVA. You must be honest and say yes even if the record is no longer on your file. Most will then not be able to help you.

Having said that there are some high street lenders who might help but they can be difficult to find. As such to avoid starting an application only to be rejected later (and possibly losing the property you want to buy) it is sensible to use a specialist broker from the start.

If you go ahead with a mortgage sourced by a broker you will be charged a fee. This will be fully explained to you before you apply.

How much can you Borrow?

If you are looking to buy a property you will always need to put down a deposit. The amount required will vary depending on whether you are able to use a high street lender.

Most high street lenders will require a minimum deposit of between 5% – 10% of the value of the property. In other words it might be possible to borrow up to 95%.

If it is less than 6 years from the start of the Arrangement and you are using a sub prime lender it is likely that they will require a larger deposit of 15% – 25%.

The amount you can borrow is also restricted by the amount you earn. As a rule of thumb this will be up to 4 – 4.5 times your gross annual income.

What will the Mortgage Cost?

The cost of a mortgage is dictated by the interest you are charged by the lender. The rates charged by high street lenders are usually the lowest on the market.

At the time of writing high street mortgage rates are at historical lows (between 2-3% over the Bank of England base rate).

If you are considering a sub prime lender you must expect to pay a much higher rate. In these circumstances you could be looking at 7-8% or more over the base rate.

A broker will charge a fee for arranging a mortgage for you (normally between £800 – £1500). This can be paid direct or added to the mortgage.

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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