IVA Mortgage | How IVA Mortgages Can Work For You
As UK indebtedness has increased, there has been more and more demand for the IVA mortgage. An IVA mortgage is a mortgage designed for people who have entered into individual voluntary arrangements (IVAs) to manage their debts. Usually, this is seen as a way of avoiding bankruptcy. An IVA consists of reaching a payment arrangement with creditors. In order to work creditors who represent 75 per cent (by value) of the debt must agree. An IVA allows the debtor to pay a set sum towards repayments every month for up to five years. At the end of that time the debt is wiped out.
The trouble is that an IVA stays on your credit record for six years after it has been satisfied, just as a bankruptcy does. This can make it difficult to get a mortgage unless you go for an IVA mortgage. An IVA mortgage is part of a family of specialist mortgage products. These are also called non status mortgages, bad credit mortgages, adverse credit mortgages, sub prime mortgages and many other names. All of these, including the IVA mortgage, are mortgages for people who would find it difficult to get a mortgage elsewhere.
High Risk Adverse Mortgage Loan
This is because having debts usually means that a person is a high risk for lenders, and unless they are specially set up for that risk, like an IVA mortgage provider, most lenders will avoid high risk borrowers. However, this is not all bad news. In fact, there are dozens of lenders who provide an IVA mortgage so there’s a lot of choice for those with bad credit problems.
One of the factors that IVA mortgage lenders will look at when deciding whether to make a mortgage offer and what interest rate to give is the length of time for which the IVA has been satisfied. Lenders’ criteria on this vary considerably, so be sure to see what your IVA mortgage has to say. Some lenders will provide an IVA mortgage to those whose IVAs have been satisfied for a year, while others will not lend to people with IVAs at all.
The IVA mortgage provider will also take into account other adverse credit circumstances such as arrears and County Court Judgements (CCJs). When all the circumstances have been taken into account, the lender will issue an IVA mortgage offer. It’s worth remembering that an IVA mortgage will not be available at the same interest rate as you may have paid for your previous residential mortgage. In fact, lenders will compensate themselves for the high risk by loading the interest rate by a few percentage points. However, once you have made the required payments on the mortgage at the right time, you may be able to switch to a product with a better interest rate after a few years.
Finding an IVA mortgage is quite simple. There is a lot of information on the internet, with many lenders having details of deals and criteria on their websites. There are also several financial comparison sites. Finally, the financial advisers have got online as well, and you may be able to find a specialist broker to advise on your IVA mortgage.