Can I get a Mortgage with an IVA ?
– Yes you CAN get a mortgage with an IVA, there will be restrictions on Loan to value and also tighter controls on affordability though.
Let me try and explain…
If you have just started an IVA, then realistically lenders are going to want you to have had the IVA running at least 12 months, to prove you can maintain monthly payments, and also to put some distance between you and the ‘event’ that caused the IVA in the first place. So 1 year in and the maximum IVA mortgage you’d get would be around 60% of the loan to value – ie 60% of the property price. So if it was a £100,000 property, the lender would lend you £60,000 maximum, meaning you’d need a £40,000 deposit
If the IVA has been running 3 or 4 years then you can get upto 75% of the property price. see the page on deposits and gifted deposits for more information on how to create the deposit required.
Can I get a Mortgage with an IVA ? – What is the maximum mortgage I can get in an IVA?
Well lenders want to make sure they are ‘lending responsibly’ which they are required to do under FCA rules, so they will be ‘cautious’ when it comes to income multiples, most lenders now tend to use complex affordability formula to work out lending amounts, but as a borad guide, think of it as about 3.0 x annual income. So if you have a joint income of £40,000, then its £40,000 x 3 = £120,000. Thats a broad generalisation and deends on you being young enough to still geta 30 year mortgage, if you’re a bit older then of course the term would reduce to the amount of years between your age and the retirement age
So Can I get a mortgage with an IVA ? = YES you can get a mortgage with an IVA, but the loan amount will be restricted to 75% and affordability is quite tight.
Can I remortgage to clear the IVA ?
Yes providing you dont need more than 75% of the property value to cover the full and final repaymnt to the IVA company, then yes you can repay your IVA early. A Lot of clients choose to repay their IVA, BEFORE getting their new or next property, to ensure that the equity in that property is then safe from creditors later down the line.