Completed an IVA? Getting a mortgage to buy a new home or release equity from your current property is possible. However you should consider using a specialist broker.
Finished your IVA and want to get a mortgage? Give us a call (0800 088 7376) or complete the form below to speak to one of our experts
Now you have completed your IVA you can apply for a mortgage. Whether the Arrangement is still showing on your credit file or it has already disappeared there are options available.
Various lenders will consider you for a range of different mortgage requirements. You may be considering buying a new property. Perhaps you want to buy your first home. Alternatively you may simply be looking to move.
If you are a home owner you may want to remortgage your existing property. This may be out of necessity because your current deal is coming to the end or you simple want to release home equity.
If you are considering releasing equity but do not want to remortgage you could also consider a secured loan.
Although it is possible to get a mortgage after you have completed an IVA you will almost certainly need the help of a specialist broker.
During the application process you are likely to be asked if you have ever been in an IVA. You must answer honestly. When you do main stream lenders will normally be unable to help you. You will therefore need a Sub Prime lender.
The record of your IVA may already have come off your credit file. However you will normally still struggle to find a main stream lender who can help.
There are different Sub Prime lenders with different acceptance criteria. A specialist broker understands your situation and will match you to the lender who is best suited for your needs. They will give you the best chance of your application being accepted.
Wilmott Turner Financial Services is not a mortgage broker. We will introduce you to a specialist third party.
One of the main factors which determines the size of mortgage you will be able to borrow is the length of time since your IVA started. This is because the longer you wait the smaller deposit you will need.
Generally speaking if it is 3-6 years since your IVA started you will need a deposit of at least 15% of the value of the property you want to buy. If it is more than 6 years then this can drop to as little as 5%.
If you started your IVA less than 3 years ago it may be possible to get a mortgage. However it will be difficult as you will require a deposit of at least 45% of the value of the property.
The other crucial factor will be the amount you earn. Generally speaking you will be able to borrow a maximum of 3-4 times your gross annual income. This may increase to 5 but it is less likely to be an option.
The cost your mortgage is likely to increase because of your IVA. Given you need to use a Sub Prime lender the interest rate you will be charged will be higher than the main stream.
The rates will depend on how long it is since your IVA started. If the Arrangement started less than 6 years ago you could be looking at 7-8% over base. However after 6 years these fall to as low as 3% over base.
In addition to the higher interest rates using a specialist mortgage broker will mean that you have to pay a broker fee. Generally this will be between £800 – £1500. The fee can be paid direct or added to the mortgage.
Once you have paid your fee to the mortgage broker 25% of this will be paid to Wilmott Turner. This cost is paid to us by the mortgage broker and is not an additional cost to you.