Mortgage after IVA

bloc75

I finish my IVA next July, and currently rent a house for £600 a month. The person we rent from is a close friend of the family and they are keen for us to buy the house from them, as am I.

However, I'm reading all kinds of stories that I won't be able to get a decent mortgage without a substantial deposit. 15% is something like £22,500, and I've heard some lenders would want up to 30%, which is closer to 50k.

That's just ludicrous, how is anyone expected to be able to get a mortgage with that kind of deposit? Even if your not in an IVA, you don't have 50k sitting around in your bank, and as your not even supposed to have a savings account during the IVA, there is no chance.

Is this the doom and gloom? Or can something be done?

Contracts_Engineer

there are people out their who have never taken an iva and who lets say have acrewed a single late charge either on an overdraft or credit card that are being refused outright for mortgages. Unfortunatly thats how it is at the minute ( we are looking at taking out an iva soon by the way )

bloc75

I understand that the market is appalling at the moment, but my point is if I am out of an IVA can I get a mortgage?

Let's say for example the market is good, and people are getting mortgages - how am I supposed to accrue enough cash to put down on a deposit, when I am not supposed to be able to save during my IVA.

I'm also hearing people saying that IVA and bankruptcy are the same in terms of credit rating - but I'm paying back £230 a month for the past 4 years. And when it's completed I would have settled around 40% of what I owed. If I had gone bankrupt I would have paid nothing back.

Country is a joke.

Contracts_Engineer

from what i understand when in an iva you are encourages to save!!! Im not sure how because if you had extra left per month, in your annual review your creditors would surely ask for a larger contribution??? I would still save as much as possible and stick it under your mattress (just not in the bank).

Secondly, from my understanding you usually make payment on an iva for 5 years but your credit rating is bad for 6 years. If you are out of debt by year 5 you have a whole year where you cant get a mortgage to save. Im not sure if you know how much you could save in this time but just your iva payement saved would = £2760 in a year. This would still be know where near a deposit but at the end of the day your out of debt.

You can also look at shared owner ship etc. to get on the ladder but really until your credit rating is clear (6 years from date of IVA) your going to struggle.

Ive posted this quote using the knowledge or my understanding from what i have read on this website. If i have got any info incorrect i apologise. Hope it helps

bloc75

No its all good advice, far better advice from my IVA agents who don't offer any advice anymore.

Shared ownership is something I have thought about, as the people we would be buying off are our close friends and they may be interested in that.

So to just come back to the credit clearance, are you saying that 1 year after my IVA I should have a clear credit rating? Obviously not going to fall into the trap as before.

Max_1066

Your credit file should be clear 6 years after your IVA started. I've recently completed a one-off IVA so the full settlement amount has already been paid. I now have to wait six years for the credit file to clear although as mentioned above its time to start saving. Thankfully house prices aren't going up at the moment.