Renting After An IVA

vicki488

Hi Everyone,

My partner and I have been looking to buy our first property but as I have previously had an IVA I can't get a mortgage without a deposit of 40%. So, we thought we will have to rent but I have heard that I will also fail the credit check to rent somewhere as well??? Does this mean that I can't live anywhere? It's utter madness. I'm 29 and still living with my parents. We have saved a deposit of 10% and thought maybe my partner could get a mortgage on his own and his parents have said they would go as guarentor but I am not sure whether anyone offers 90% mortgages with guarentors anymore?

As you can imagine I'm panicing as I don't want to live with my parents at 29 (I'm not getting any younger). We have also tried the council to see if we could get somewhere through them and they basically told us that there is no point in us applying as we don't have kids. The reason we don't have kids is because we can't find anywhere to live lol! It's a vicious circle.

Thanks for listening to me waffle on!

N79

Since you have an IVA you have shown that you have a history of failing to meet your legal obligations. When you rent a house, a LL is trusting you with a valuable asset in return for money. With your history of failing to meet your obligations many LLs are not willing to take that risk. I hope you can understand this point. It is not madness - but rational behaviour from LLs.

Now, on to practical help. You don't mention how long ago you started the IVA and whether it is still ongoing. The further back the more LLs you will be able to find who will be willing to have you as a T. In searching for a property here are some tips:

1. Be up front at the start with Agents about your financial history. They will know which LLs may be willing to consider you and which will definitely not. This saves you time and money in looking at houses that will never be let to you.

2. Be up front with any private LLs you approach for the same reason. Remember that LLs hate surprises when they reference tenants as this is an indication of being untrustworthy - and you already have one of the biggest neon signs for being untrustworthy - the IVA!

3. Limit your expectations. LLs with the best property stock will probably be priced for the best Ts - which you are not going to be on paper. Therefore you may need to accept lower range properties / areas, at least for 12 months or so while you build up your reputation as a good tenant. You can always move in a year or 2 when you have a good LL reference.

4. Good luck - you will find the right house and LL as there are LLs for all segments of the market. You just might not get the dream house straight away.

madeupname1

I am not expert on this, but if his parents are willing to stand as guarantor on your rental (which I assume they would be since they are willing to stand as guarantor on a mortgage), that should help your chances of securing somewhere decent.

vicki488

That's a good point madeupname1. N79 - I started the IVA in Jan 2006, it ended in Jan 2011, so it will drop off my credit file in Jan 2012, so in theory creditors will only know about it if I tell them, which I know that I have to do when applying for credit. I also rented a flat from 2005 (before the IVA started) through until 2007 and I never missed a payment in rent, so would get a good reference from the letting agent. The only reason I left the flat is because my husband and I seperated.

N79

I would recommend you wait another month then as then you will have a clean credit record and don't need to worry.

vicki488

Thanks N79. It will be clean but apparently all lenders ask whether you have ever been decalred bankrupt of had an IVA and I would have to tell them. If I didnt and they somehow found out all hell would break loose!

N79

Lenders might but LLs will not (and even if they did would have no way of checking once all the defaults are off your credit record). My comments are only aimed at the possibility of you renting a property.

vicki488

If I found somewhere to rent through an estate agent I think the estate agent carries out a credit check on behalf of the landlord? And they are likely to ask the dreaded question. If I said no then they'd probably never know but I would be in a constant state of panic incase they found out.

BitterAndTwisted

In which case why doesn't your partner apply to rent a one-bedroomed property in his name only? Landlords can't prevent a partner moving in especially if they don't know there is one. Does you partner earn enough to pass the affordability tests?

vicki488

Yes my partner would earn enough to rent somewhere himself. I think we will most likely go down that route if he can't get a large enough mortgage to buy anywhere. His dad will go guarantor on mortgage but I'm not sure we will be able to find a 90% mortgage.

timberflake

It would be worth checking Equifax to see what your credit score is and make sure the IVA drops off your profile when it's meant to.

I've recently checked mine, I was in an IVA until March 2010, and whilst it's showing a satisfied, 3 of the debts which were included in the IVA are currently showing as deafaulted so I am in the process of getting these removed.

My IVA is still showing on my profile and it's been more than 6 years since I went into it. I'm not sure whether this stays on your profile forever or longer than 6 years?