Mortgages with an Individual Voluntary Agreement (IVA)

An IVA is a legally binding agreement between you & your creditors that allows you to pay off your unsecured debts affordably. You will make payments via a licenced IVA practitioner.

If you have an IVA and stick to the agreement, you’ll get protection from your creditors taking further action against you and a chunk of you debt will be written off.

Types of credit allowed under an IVA can include:

• Bank overdrafts

• Personal loans

• Credit cards and store cards

• Catalogue debts

• Council tax arrears

• Funds owed to HMRC

An IVA is arranged by an insolvency practitioner. You and your creditors will agree on a payment plan that takes into account your current financial situation and how much you can afford to repay. An IVA is useful to stop you falling into more debt because your creditors agree to freeze the interest on what you owe, meaning you won’t continue to build up interest.  Plus, it gives both parties clarity on what will be repaid, and when.

Repayments under an IVA are usually made monthly, but can be made as a lump payment. At the end of the agreement, you won’t owe any more money to your creditors.  

Despite the positives, an IVA will show up on your credit file and will negatively impact your credit score and will stay on your file for six years. But the benefit of an IVA is the debt is frozen – and you can make repayments that are affordable to you.

Your credit rating will take a hit.

Defaults and any other adverse markers that are registered by your creditors, usually at the outset of your IVA will stay on your credit file for six years. So, if your IVA proposal was to make payments over five years then these markers will only stay on for a further 12 months after the IVA ends. The same is true even if the IVA fails or if you have completed the IVA early, those adverse markers will still be present for 6 years from the day it was registered.

An IVA will stay on your credit file for a period of six years, starting from the date that it was approved. It’ll be marked as ‘complete’ when you have settled the debt, but it’ll be visible for six years. During that time, your IVA will flag up to lenders. In addition, any debts that were included as part of your IVA may be included separately on your credit report. 

We recommend that you obtain a detailed credit report before making any mortgage enquiry, just so you know at first hand how the IVA has effected you.

To enable us to accurately source the most suitable mortgage deal & obtain the lowest rates possible we will need to see a detailed copy of your credit file please.

To access this for free CLICK HERE

Many high street lenders need your IVA to have completely left your credit file before they will consider you for a mortgage.

That happens six years after the start date of the IVA.

Specialist lenders are happy to consider you  even if it is still active on your credit file (under six years from the start date).

Those specialist lenders will still prefer the IVA not to be particularly recent. The starting point is generally 2 years after the IVA has been discharged. However in certain circumstances, we can assess before this point.

1) Prove where you live — Register on the electoral roll. This is a good idea as lenders can verify who you are and make you appear more stable.

2) Open a bank account — Managing it well shows companies you are now financially stable. If you have an overdraft, make sure to stay well below the limit and try to pay it off as quickly as possible.

3) Get a credit builder credit card — The likes of Capital One or Vanquis are good for providing you with a credit card if you now have poor credit. Paying it off on time will help you to build positive credit and improve your credit rating. Be careful not to go overboard with this!

4) Get your name on utility bills — Utility bills such as your gas or electricity bills count as a form of credit. Paying these off and keeping up to date with monthly payments help to improve your credit rating.

5) Pay those bills on time — We are only human, and it is often easy to lose track of what payments are due when. To stay on track, it is a good idea to set up a direct debit with your bank for certain bills as this means the money is withdrawn and transferred to the lender on the same day of every month. You can relax, and your credit score will be better for it. 

Feel free to call us on 0330438038

Alternatively email [email protected]  outlining your overall requirements.