Can you get a Mortgage on an Individual Voluntary Arrangement (IVA)?

If you’re on an Individual Voluntary Arrangement (IVA) to clear unsecured debts or you’d like apply for an IVA, an important consideration is whether a buying a home with a mortgage would be an option for you. Find out more here.

If you aspire to secure a mortgage and own your home, then you might be concerned that your debts could prevent you from having your own home as a first-time buyer. Debt solutions to resolve your debts, such as an Individual Voluntary Arrangement (IVA), may be a great step to help you with your financial situation. However, you might wonder whether an Individual Voluntary Arrangement could stop you from being able to secure your own home. Although this may be a challenge, an IVA won’t necessarily rule out the option of getting a mortgage.

Getting a mortgage with an IVA

When you start an Individual Voluntary Arrangement to help with repaying your debt, this is documented your credit report. This may show creditors that you’ve had problems repaying lenders. As a result of this, creditors may be more hesitant to approve your application than they would if you hadn’t been in debt. This may mean you might have less access to the best mortgage deals or may have to use a specialist mortgage broker to help you. Having said this, it’s not impossible to get a mortgage during an IVA.

Would mortgage lenders lend you money without an Individual Voluntary Arrangement (IVA)?

Although this sounds like an Individual Voluntary Arrangement would impact your mortgage applications, realistically, you should ask yourself the question of whether you would get a mortgage while still in debt. A mortgage calculator and research on mortgage types and mortgage lenders may help you to gain more guidance on this question. If repaying creditors is currently a struggle or you miss payments, this information can also impact your credit score as it will also be included on your credit report and may affect your credit score negatively.

If you remained in debt instead of choosing a debt solution to help you, arguably, a mortgage broker may be equally as likely to refuse your mortgage request as if you had taken on an IVA to help you clear unsecured debts. For this reason, if you aim to get on the property ladder, it might be best to consider waiting until your debts are repaid.

Can you get a mortgage after an IVA?

After you’ve repaid your debt, this may leave you in a better position to save for a house deposit and also begin improving your credit score in order to help you secure a mortgage. This may take some patience and time to get to this stage, but in the long-term this could give you access to better deals when buying a property.

Would you like more advice on your Individual Voluntary Arrangement?

An Individual Voluntary Arrangement won’t completely bar you from buying a property with a mortgage, but it may make the process more of a challenge. However, for some people an IVA is the best option to help them clear their debts and become more financially stable. For more advice on your personal circumstances, and whether an IVA is the best solution for you, click the button below and one of our advisors will get in touch to help you.

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 may be 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 could also be much better for your finances.