You can get a mortgage after your IVA has finished.
That’s said, the type of mortgage deals available to you will depend very much on the status of your credit file and the amount of deposit you can offer.
We offer guidance in these areas and whether or not using a specialist broker will improve your chances of securing a mortgage.
When can you get a mortgage after an IVA?
There is no specific time that you have to wait after you complete your IVA before you can apply for a mortgage. However, the chances of you getting the best mortgage deal will be significantly improved if you wait at least until the record of the Arrangement has come off your credit file.
Regardless of the date your IVA is completed, the record will only be removed from your file on (or just after) the 6th year anniversary of the start date. As such, the IVA start date is the most important date, not the completion date.
If you complete your IVA before the 6th year anniversary of starting, the record will still remain on your file until the 6th year anniversary has passed. There is nothing you can do to change this.
You are unlikely to be able to get the best High Street lender mortgage deals until the IVA record has been removed from your file. There may be options to get a mortgage sooner. However the deals will be more expensive in terms of higher interest rates.
How much could you borrow?
The size of mortgage you can borrow will depend on your income.
A good rule of thumb is 4 x your gross annual income. So if you earn £40,000 per year, the maximum mortgage you could borrow would be £160,000 (4 x £40k).
Some lenders might allow a slightly larger multiple (for example 4.5 x your annual income). However, this will very much depend on your wider financial circumstances.
You will be able to borrow more if you plan to buy a property in joint names with someone else. In that case, both your incomes are combined. So if the combination of your two incomes is £80,000 pa, you could borrow up to £320,000.
Remember, when calculating the total offer you could make to buy a house, you also need to add the amount you will be putting down as a deposit.
What amount of mortgage deposit will you need after an IVA?
The amount of deposit you will need to put down to get a mortgage after an IVA will depend on how much time has passed since your Arrangement started.
If your IVA started less than 3 years from the completion date, the record will still be on your credit file. As such, you would need to use a specialist lender (often known as a Sub Prime lender) who will be likely to require a higher deposit.
In these circumstances, you can expect to have to put down at least 30%-40% of the purchase price of the property as a deposit.
If you are looking to buy 3-6 years after the start date of your IVA the, you may get a mortgage deal with a slightly lower deposit – perhaps 25% of sale price.
The amount of deposit required only falls significantly (to 10% or less) after 6 years from the start date of your IVA. In other words after the record has come off your credit file and most competitive High Street lender deals start to become available.
Should you use a specialist mortgage advisor?
If you want to get a mortgage after your IVA, we strongly recommend that you use a specialist mortgage advisor.
A specialist advisor will take into account the date when your IVA started and was completed and will be able to match you to an appropriate lender.
Where you are applying before the record is removed from your credit file (6 years from the start date) you will almost certainly need a Sub Prime lender. Generally speaking the only way you can make an application to such lenders is through a broker.
Even 6 years plus from the start date many High Street lenders will still reject your application when they learn of your IVA. A broker will be able to identify the High Street lenders who can help
IVA Expect can recommend an experienced specialist broker. Contact us for more information.
Why choose IVA Expert?
IVA Expert is not a mortgage advisor and we can’t advise you about specific mortgage options.
If you would like further mortgage advice, we can put you in touch with an experienced specialist mortgage broker who will work with you to secure the best possible mortgage for you.
Cost
Our information is free
Any information we give you about getting a mortgage after your IVA is free of charge.
If you decide to use a mortgage broker, they will normally charge a broker fee. This is charged if you decide to take up an offer of a mortgage they have secured for you.
The amount charged will generally be between £1000 – £2000 depending on the amount you borrow.
The fee can be generally be paid direct or added to the mortgage.
How It Works
Guidance
When you can apply for a mortgage
How much you could borrow
What type of deposit will you need
Introduction
Introduce you to a specialist 3rd party mortgage advisor
Get specific advice about your mortgage options
Mortgage Application
Mortgage advisor completes details fact find
Key supporting documents collated
Mortgage application completed and submitted
Future Support
Talk about future mortgage options
Specialist advice from mortgage advisor when it's time to look for a new deal
Completely FREE advice
Confidential conversations
Expert help always at hand
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Your openness and transparency throughout the process were greatly appreciated and helped me feel reassured every step of the way. I wholeheartedly recommend your services to anyone facing similar challenges. Your support has made a significant difference in my life.
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Thank you again for all your help and support.
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