Can I Get a Mortgage If I Have an IVA?
It is possible to get a mortgage if you have an Individual Voluntary Arrangement (IVA), although your options are likely to be more limited than someone with a clean credit history.
Many high street lenders will automatically decline applicants with an active or recently completed IVA.
However, some specialist mortgage lenders may be willing to consider your application depending on when the IVA was registered, whether it has been satisfied and the overall strength of your finances.
Every case is different, and having an IVA does not automatically mean home ownership is out of reach.
Not Sure Whether Your IVA Will Affect Your Mortgage?
An IVA does not automatically mean you cannot get a mortgage, but the options available will depend on your individual circumstances.
Speak to one of our advisers for personalised advice and find out which lenders may be willing to consider your application.
What Is an IVA?
An Individual Voluntary Arrangement is a legally binding agreement between you and your creditors that allows you to repay all or part of your unsecured debts over an agreed period, usually five or six years.
IVAs commonly include:
- Credit cards
- Personal loans
- Store cards
- Overdrafts
- Utility arrears
- HMRC debts
At the end of the arrangement, any remaining qualifying debt may be written off.
While an IVA can provide a route out of serious debt problems, it will affect your credit history and future borrowing options.
Does an IVA Affect Your Credit Score?
An IVA is considered one of the most serious forms of adverse credit and can significantly reduce your credit score.
Mortgage lenders see an IVA as evidence that you previously experienced financial difficulties severe enough to require a formal debt solution.
Even after the IVA has been completed, it remains visible on your credit report for six years from the date it was registered.
However, lenders do not assess applications based solely on a credit score. They also consider:
- Current affordability
- Income
- Employment stability
- Deposit size
- Financial conduct since the IVA
Can You Get a Mortgage with an Active IVA?
Obtaining a mortgage with an active IVA is significantly more difficult but not always impossible.
Most lenders will decline applications while the IVA remains in place. This is partly because IVA agreements often restrict further borrowing and because lenders view ongoing insolvency arrangements as a significant risk.
In practice, very few lenders are willing to consider active IVA cases. If you currently have an IVA and are considering a mortgage application, seeking specialist advice before making any applications is essential.
Can You Get a Mortgage After an IVA Has Been Completed?
Once an IVA has been satisfied and you have received a completion certificate, certain lenders may be prepared to consider your application even if the IVA still appears on your credit report.
Factors lenders will assess include:
- How long ago the IVA was completed
- Whether there have been any further credit issues
- Your current financial situation
- Your deposit size
- Your income and affordability
Generally speaking, the longer ago the IVA was completed, the more lenders become available.
How Do Mortgage Lenders Assess IVA Applications?
When assessing a mortgage application from someone with an Individual Voluntary Arrangement (IVA), lenders look at far more than the IVA itself.
Their aim is to understand your current financial position, how you have managed your finances since the IVA, and whether you are likely to be a reliable borrower going forward.
One of the most important factors is the amount of time that has passed since the IVA was completed. In general, the older the IVA, the more favourably it is viewed by lenders.
They will also want to see evidence that any financial difficulties are firmly in the past, demonstrated through responsible financial conduct and a positive recent credit history.
Lenders will carefully assess your income and affordability to ensure you can comfortably manage the mortgage payments.
A stable income, whether employed or self-employed, can strengthen your application. The size of your deposit is also important, as larger deposits often increase the number of lenders willing to consider your case and may help you access more competitive mortgage rates.
In addition to the IVA, lenders will review your wider credit profile. Any missed payments, defaults, or County Court Judgments (CCJs) that occurred after the IVA may make obtaining a mortgage more challenging.
However, some lenders are prepared to take a more flexible approach where there were genuine mitigating circumstances, such as illness, divorce, redundancy, or business failure.
Find out Your Options
Common Mistakes to Avoid
If you are applying for a mortgage after an IVA, avoiding common mistakes can significantly improve your chances of success. These include:
- Applying to multiple lenders without guidance, which can result in repeated credit searches and unnecessary declines.
- Failing to check your credit report to ensure the IVA is recorded correctly and marked as completed where appropriate.
- Applying too soon before your financial position has fully recovered, limiting the lenders available to you.
- Focusing solely on high street banks, when specialist lenders may offer more flexible criteria.
- Not providing a clear explanation of the circumstances that led to the IVA, which can help underwriters better understand your situation.
How to Improve Your Chances of Mortgage Approval
There are several steps you can take to strengthen your mortgage application after an IVA.
Completing the IVA and obtaining your completion certificate is essential, as many lenders will request evidence that the arrangement has been successfully satisfied.
It is also important to rebuild your credit profile by making all payments on time, keeping borrowing under control, and demonstrating responsible financial management.
Saving a larger deposit can further improve your options, while regularly checking your credit report helps ensure all information is accurate and up to date.
Finally, seeking professional mortgage advice can make a significant difference. An experienced mortgage broker can identify lenders that are more likely to consider your circumstances, helping you avoid unnecessary applications and potentially saving considerable time, stress, and frustration.
Frequently Asked Questions About IVAs
Can I get a mortgage with an active IVA?
Possibly, but options are extremely limited and specialist advice is usually required.
Can I get a mortgage immediately after completing an IVA?
Some specialist lenders may consider applications shortly after completion, depending on the wider circumstances.
How long does an IVA stay on my credit file?
An IVA remains visible for six years from the date it was registered.
Will I need a bigger deposit after an IVA?
Often yes, particularly if the IVA was completed recently.
Can first-time buyers get a mortgage after an IVA?
Many lenders assess the overall application rather than focusing solely on historic credit issues.
Can I remortgage if I have had an IVA?
Existing homeowners may still have remortgage options depending on their circumstances.
Which lenders accept IVA mortgages?
Criteria change regularly. Specialist lenders are generally more likely to consider IVA applications than mainstream banks.
Does an IVA automatically mean mortgage rejection?
While some lenders will decline applications, others assess cases individually.
Conclusion
Having an IVA does not automatically prevent you from getting a mortgage but it is certainly more difficult.
Whether you have a current IVA or a completed one, lenders will look at the bigger picture, including your income, affordability, deposit, credit conduct since the IVA and overall financial stability.
If you have had an IVA and would like to know what may be possible, we can assess your circumstances and help you explore the most suitable routes forward.
Contact Kerr & Watson today to speak to an experienced mortgage adviser.
