Can I Get a Mortgage in London With an IVA?

What is an IVA?

An Individual Voluntary Agreement (IVA) operates as a legally binding arrangement between somebody who is struggling with heir debts and the creditor that they owe their debt to.

The primary aim of an IVA is to establish a well-organised structure for you to pay back your debts on a monthly basis, typically spanning over a period of roughly 5 years, with the goal to help you get your debts under control.

An Insolvency Practitioner plays a very vital role as a representative of you in this situation, engaging with creditors to guarantee the timely and consistent fulfilment of your outstanding payment commitments.

Can I get a mortgage in London with an IVA?

While having an IVA (Individual Voluntary Arrangement) can present challenges when seeking a mortgage, it is not an insurmountable hurdle. In such situations, we strongly recommend consulting with a mortgage broker in London to explore available options.

Engaging with a professional is essential, primarily due to the terms and conditions outlined in your IVA agreement. Committing to an IVA involves various agreements that can impact your eligibility for loans, including mortgages.

These terms typically remain in effect until you have successfully repaid all outstanding debts. Seeking guidance from a mortgage broker becomes key to navigate complexities and explore viable solutions tailored to your circumstances.

Is an IVA right for me?

Affordability is the primary consideration in an IVA. Creditors require assurance that you can sustain your repayments while maintaining sufficient disposable income to cover housing and other essential living expenses.

How does an IVA affect my mortgage application?

Considering an IVA often implies a history of significant credit challenges, and obtaining a mortgage in London with an IVA might pose difficulties. Mortgage lenders are typically cautious about lending to individuals deemed high-risk due to past credit issues.

Alongside assessing your credit history, lenders scrutinise your disposable income. With an IVA, a substantial portion of your income is likely allocated for debt repayment.

Combining this with potential mortgage payments may raise concerns about having enough remaining income for essential living expenses. People who are looking at moving home in London may want to consider waiting to make any decisions.

As a strategic approach, we recommend reducing a significant portion of your debt before exploring mortgage options.

Can I get a mortgage in London after an IVA?

After settling your IVA, it’s advisable to assess your current financial situation thoroughly before diving into the mortgage process. Rebuilding your credit score, accumulating a deposit, and carefully planning your move into a new home are important steps.

Affordability remains a priority in the home-buying process, and confirming your financial means for a mortgage is essential.

Our team of specialist mortgage advisors in London is ready to help evaluate your mortgage affordability, explore suitable options, and tailor a solution that aligns with your unique personal and financial circumstances.

Feel free to connect with a mortgage advisor in London for a free consultation online or via phone.

Date Last Edited: February 1, 2024