How Long After An IVA Can I Get A Mortgage?
How Long After An IVA Can I Get A Mortgage?
The short answer: You can apply for a mortgage on Day 1 after your IVA is satisfied. A small number of specialist lenders will even consider you while you’re still in one. The longer your IVA has been satisfied (and the cleaner your credit since), the more lenders will be available to you and the better the rates.
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What is an IVA?
IVA stands for Individual Voluntary Arrangement. It’s where a third party, known as a practitioner, gets involved in your finances. They set up a legally binding agreement between yourself and your creditors to pay off some or all of your debts over time.
How long after an IVA can you get a mortgage? Do you qualify for a mortgage after an IVA?
There are dozens of lenders up and down the country, each with their own individual criteria. When it comes to IVAs, most of the lenders who consider them don’t rely on a credit score. So you don’t have to worry about your score reaching a certain level – it’s all about their criteria.
In terms of how long after an IVA you have to wait, the good news is that you don’t. Many lenders will consider you for a mortgage on day one after it’s been satisfied. A handful will even consider giving you a mortgage whilst you’re still in it.
Can I change my mortgage after an IVA? Does having had an IVA affect a mortgage application?
Changing your mortgage is subject to normal lending criteria. Any kind of mortgage application will be assessed based on criteria at that time.
Whether you’re changing a mortgage or applying for a mortgage, there are lenders who will consider both active IVAs or recently completed IVAs. It’ll be based on their criteria and what rates and terms they’re willing to offer at the time.
Having an IVA does affect a mortgage application. Lenders have certain rules – such as that an IVA must be satisfied, or must have been satisfied for a certain number of years. The more recently you’ve had the IVA, or if you’re still in it, the fewer lenders will consider you.
Those that do consider active or recent IVAs will have higher rates than you’d get on the high street. The older the IVA becomes after satisfaction, the more lenders will consider you.
Once it’s been satisfied for three years, if you’ve had a clean credit history in the meantime, potentially even some high street lenders could still consider you.
Can lenders see an IVA after six years?
Yes, they can. It doesn’t normally show up on your credit file, so they won’t see it when they do a credit search. But other background checks they do, such as the Insolvency Register, will still show up your IVA.
Can you port a mortgage after an IVA?
Yes, you can. It depends on the specific terms of that individual lender. Some lenders will allow mortgages to be ported as standard practice. Some will not.
It depends on the individual appetite of that lender at the time. But assuming you meet their criteria, there’s no reason why you wouldn’t be able to port your mortgage.
How can I rebuild my credit score after an IVA?
The main thing is make sure that you manage perfectly any credit commitments that weren’t involved in the IVA, or that you’ve taken out since. Aim for not a single mispayment.
That includes everything, not just credit – phone bills, utilities, insurance, that kind of thing. Make sure that literally every type of credit account you have is managed pristinely.
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How soon can you remortgage after an IVA?
You can do it on day one after an IVA is satisfied with certain lenders.
What is a windfall clause? Should I beware of a windfall clause if I was gifted a deposit or received money after an IVA?
Nine times out of 10 a windfall clause is included within the terms and conditions of the IVA. It means that if you come into any kind of money unexpectedly, like a bonus inheritance, lottery or gambling winnings, you must pay that in towards the IVA.
That can potentially have an influence on your mortgage options. Even though we’re discussing getting a mortgage after an IVA, certain lenders will still consider lending to you while the IVA is in place.
Something that often ties in with the windfall clause is that you cannot borrow money unless it is to pay off the IVA. They are very important things to look into in terms of an IVA.
I’m not a legal professional, so I can’t say for this for certain, but I would expect that once the IVA has been finished or has been satisfied, you’re not bound by any clauses within that IVA.
So if the IVA has been satisfied and you come into money, I wouldn’t expect you to have to pay that money back.
However, the terms of each individual IVA agreement aren’t uniform and can vary. That would still be something to double check with the IVA practitioner if that is a concern.
Should I declare if I’ve had an IVA to my mortgage lender? Why is it important to discuss an IVA with my broker when applying for a mortgage?
It depends on the exact wording of the lender because with some, it’s similar to a bankruptcy. If it’s over six years old and you’ve been discharged from it, you’re not legally obliged to voluntarily disclose that you’ve had an IVA.
However, if you are asked if you’ve ever had one, you must tell the truth. Certain lenders do ask ‘have you been party to an IVA within the last six years?’ If you’ve had an IVA, but it’s been satisfied for longer than six years, technically you can answer no to that question.
Other lenders ask, ‘have you ever been party to an IVA?’ You would have to declare yes, regardless of how long ago it is, because they’re not putting a timeframe on it. So it depends how the lender words the question.
You must answer honestly, because it can be seen as being deceitful to the lender if you don’t.
What else do we need to know about getting a mortgage after an IVA?
If you’ve had to go into an IVA, that’s one step away from a bankruptcy, which is about as bad as it can get when it comes to your finances. With the lenders who will consider an IVA, the underwriting is very involved and detailed.
You need to make sure that you’ve got your ducks in a row and your bank statements show that you’re now managing your finances perfectly and properly. Basically, we need to show the lender that the risk of lightning striking twice is very small, if not non-existent.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
