Can I get a mortgage as soon as an IVA is paid off?

Ella1976

My husband has an IVA which was taken out 3 years ago and he is currently paying a monthly contribution towards the debts. Soon after the IVA was taken out we got a sub-prime mortgage during the property market boom.

Now we want to move house & no-one will give us a mortgage because of his credit rating. I could possbly get a mortgage in my name only but at 5 times my salary it may not be approved. The providers might also associate me with my husband through ouor address and the mortgage offer rejected.

Does anyone know, if we were to take a loan out and pay off the IVA (total outstanding debt is £25k but we've been told we might be able to settle at £12.5k), are there any mortgage providers that would offer us a mortgage?

danielanthony

I finished my IVA after 5 years, I had to wait another year for the defaults to drop off my file before applying for a mortgage.

So 6 years after the start date of my IVA I got a mortgage with a mainstream lender at a very good rate on a 90% mortgage.

In your situation, if you paid off the IVA after 3 years your credit file will still be hammered for another 3 years. Even though its your husband in the IVA you are linked by association by the CRA's so you'll probably unable to get a mortgage either.

If you have a big deposit (50%+) I would contact a mortgage broker who specialises in adverse credit mortgages as these are coming back. If you dont have such a deposit then I think you'll have to wait until both your credit files are cleared up.

Ella1976

Thanks. I spoke to a specialist mortgage broker recently who said he has underwriter contacts who would consider giving us a mortgage after a few months of settling the IVA. I'm just not sure whether to trust him or not. If we sell our flat now to release equity we might not get back on the property ladder for another 4 years. But on the other hand, we really need to move house.

Oldernotwiser

Ella1976 wrote: »

Does anyone know, if we were to take a loan out and pay off the IVA (total outstanding debt is £25k but we've been told we might be able to settle at £12.5k), are there any mortgage providers that would offer us a mortgage?

Are you allowed to take out further debt when on an IVA? Who would lend to someone in this situation?

Ella1976

I would try and take a loan out in my name as I have a good credit rating and the IVA is in my husband's name. I've been told I should be ok.
The other option is to sell up and use the equity from the property.

MIVAA

Hi Ella1976

Selling up and using the equity from the property could come with issues.

Have you spoken to your husband's IP yet, to establish exactly what they would expect of you if you did this.

You may find that by selling your property you inadvertently create a situation where your IP might expect all your husbands equity to be passed over under the windfall clause.

You should discuss your options openly with the IP so that you fully understand all the options available to you, and how they would work before you decide what to do.

but we've been told we might be able to settle at £12.5k

May I ask who suggested this figure as being enough to settle is IVA?

Ella1976

Thanks, I hadn't thought about the windfall clause, I will look into this.

My husband's IP gave us an indication that we could possibly come to an agreement with the creditors to settle at 50%.

MIVAA

Normally, the funds that are to be used in final settlements should be provided from 3rd parties, and not necessarily from the person in the IVA.

This would then give the creditors an offer of receiving a payment that they would not be otherwise entitled to, hence the benefit of accepting the offer.

This 3rd party could be yourself, or a friend or relative - As I say, take advice from the IP.

Good luck.

MIVAA

james32_uk

danielanthony wrote: »

So 6 years after the start date of my IVA I got a mortgage with a mainstream lender at a very good rate on a 90% mortgage.

Out of interest did you declare your IVA when asked if you had ever been bankrupt or made payment arrangements with your creditors?

danielanthony

It was never asked, but our solicitor did do a check on the bankruptcy register, obviously as I had not been made bankrupt this was all ok.

The reason I know this as someone with the same name as me popped up as having been made bankrupt, but registered as living the opposite end of the country, I had to confirm that I was not him.