Can I Get a Mortgage With an IVA?

An IVA is a popular debt solution used by thousands of people every year. However, while this agreement is active, getting access to mortgages (and other financial products) can be difficult.

However, it isn’t completely impossible. Potentially, you could still get a mortgage after an IVA.

Realistically, would you have got a mortgage before an IVA?

An IVA shows up on your credit file and will typically stay there for a year after the agreement ends. If you apply for a mortgage during this time, lenders will be able to see the IVA on your report. While this demonstrates that you took positive steps to resolve your debts, it also shows to the lender that you’ve had problems paying back what you owe.

Therefore, they may be less inclined than they otherwise would be to approve the mortgage.

Let’s ignore the IVA for a second though. If you make an application for a mortgage while still owing thousands of pounds worth of debt to other lenders, this also demonstrates that you have problems repaying creditors.

In this situation, it seems unlikely your mortgage application would have been approved anyway. Arguably, an IVA could eventually help you get your dream home – not hinder it.

Why is getting a mortgage during an IVA difficult?

Obtaining a mortgage during an IVA is, unfortunately, virtually impossible. As mentioned, lenders are unlikely to approve an application while this agreement is active. Furthermore, credit worth more than £500 needs to get approval from your insolvency practitioner. These two issues mean it’s very hard to get a mortgage while your IVA is active.

Afterwards though, is a completely different story.

Can I get a mortgage after an IVA?

Once your IVA ends, it will eventually disappear from your credit report. As this agreement should have cleared your debts, your rating should start looking much better than it was before you completed the IVA.

Once the IVA ends, it’s tempting to start your mortgage application almost straight away. However, by focusing on improving your credit score – and saving for a deposit – you’re more likely to get better deals from lenders.

It’s worth noting that some mortgage providers flat out refuse to work with anyone who has had an IVA.

However, many will certainly consider you. Once your IVA has been completed, you’ve got your finances under control, and you’ve started to rebuild your credit score, more options should become available.

Therefore, getting a mortgage after an IVA is certainly possible.

Let’s deal with debt first – then focus on the mortgage

Buying a home is an exciting experience. However, struggling to make the payments while juggling other debts can be stressful – to say the least. Resolving your accounts with creditors is a more sensible decision and should be prioritised before getting a mortgage.

Ultimately, this will stop you getting on the property ladder for a few years but this decision should open up better deals and more options. In the long run, it’ll also be much better for your finances.