With the current housing market being what it is; house prices constantly rising, along with a cost of living crisis that quickly depletes the financial reserves of even the most thrifty amongst us, there has never been a more challenging time to jump on to the housing ladder. But what if you have an IVA? In this article we will discuss how an IVA may affect your chances of getting a new mortgage if you are either buying a property as a first time buyer, moving house, or renewing your mortgage term.
What Is An IVA?
An IVA (Individual Voluntary Arrangement) is a formal debt solution set up through an Insolvency Practitioner. It is a legally binding agreement between you and your creditors, whereby you pay a contribution towards your debt for a period of either five or six years. At the end of this period, any debt included in the agreement, which remains, is written off. Sometimes this can be as much as 75-85% of the total debt amount.
Is It Possible To Get A Mortgage With An IVA?
It can be unusual for someone who is currently dealing with an IVA to be considering purchasing a new home, but this circumstance does occasionally come up, especially if the person in question has come into a significant windfall, or if their employment income has substantially changed.
When considering a mortgage application whilst on an IVA, the elephant in the room is usually your credit history or credit score. Naturally, it is common for a person with an IVA to have missed payments on their credit score, or other such evidence that they were struggling before becoming insolvenct