Single, first time buyer, post IVA?

YorkshireT

Hi, I'm new to this excellent forum and just after a bit of advice.


I had an IVA that commenced over 7 years ago, completed in full over 2 years ago (with no missed payments or problems of any kind) and finally dropped off my record (after having to check and correct an out of date entry on the Insolvency Register, and then my credit reports with the 3 main credit reference agencies) about 3 months ago.


My credit file is now clean i.e. no defaults or public records, but I haven't yet begun to apply for any credit as a way of building my credit score, which I know is important.


The reason I'm here is because, having put the difficulty of the IVA behind me, I'm trying to rebuild my life and have begun saving. Ideally I'd like to think the saving is aimed at a deposit for a house. What I'd like to know is whether, as a single person and first time buyer, there's actually a chance of getting a mortgage with any half decent lenders?


Again, I know that it may be difficult to obtain the top rates at some of the big high street lenders, and I know it's advisable to avoid a firm that was part of my IVA. But that aside, I'd just like to know if somebody in my position would stand a chance without resorting to extortionate rates in the sub-prime market. I'd be aiming for 10% deposit minimum.


Any advice on what to expect, how long to wait, and what to do to enhance my chances would be greatly appreciated.

longtermplanner

You need to rebuild your credit score at the same time as saving up for the deposit. Get a credit card, any card, even Vanquis, to start the credit rebuilding process, use the card every month and repay in full each month.

Your credit record is now 'clean' but empty.

How long to wait depends on how long it will take to save up the deposit. If you can save 10% really quickly, under a year, then take a bit longer and save 20%!

YorkshireT

Thanks. I have a mobile phone and broadband contract that have always had monthly maintained payments but I guess I'll have to get an actual 'credit' account too.


The difficulty I find, as someone that has experienced the utter distress that led to the IVA in the first place, is that I now almost subconsciously associate credit cards with unhappiness, fear and regret. It's a hard jump to make back into that world (even in a small and controlled way) but like you say I guess it's important before looking to take on the biggest debt of all and buy a house.


It's just nice to think there's some hope that the IVA won't be a life sentence and I may one day be able to get on the property ladder.

UpToMyNeckInIt

Hi YorkshireT,

Well done on coming out of the other end of your IVA.

Assuming your credit file is now clear of all defaults (I assume you have checked with all 3 credit agencies?), you should have no more bother getting a mortgage than anyone else.

The only potential issue is that some lenders ask questions such as: 'Have you ever been subject to bankruptcy' (to which you can honestly answer 'no'); but some might ask about 'insolvency', in which case you have to answer 'yes'. whether or not this proves to be terminal, I don't know.

A good way forward, (as advised anecdotally by other ex-IVA customers who have successfully got a high-street rate mortgage in this way), is to consider using a 'whole of market' mortgage broker (personally, I've always used one, regardless of my IVA, as they have always managed to negotiate the best deals for me).

Good luck.

Foxy-Stoat_3

Neck is correct.....use a whole of market broker who has placed an ex-IVA person recently...be upfront with the broker, they will know who to approach and who will be adverse to ex IVA'ers.

I finished my IVA and within 8 months I had a mortgage secured with a high street lender via a broker at sensible rates with 25% deposit....you may struggle with 10% though.

Credit cards are not evil, only spending money that isn't yours is. If you take out one card and use it for fuel ONLY and clear the balance when you get the statement, you won't go far wrong....keep the credit limit at £250 and ask them reduce it when they increase it you will be fine. It all goes wrong when you walk into the supermarket and see the 46inch LED tv's for £400 lined up and nothing is easier than to buy one !!!!

Good luck !!!

YorkshireT

Thanks again to both of you, good advice.

Yes I've obtained my credit reports from all 3 and, whilst the scores vary (I gather not to read too much into this) they are all clean with the only negative factor being no existing credit accounts. I'll look to address this and use it for small monthly expenditure only, clearing the balance each month.

When the time comes I'll seek out a broker and evaluate the options.

What does concern me, and I imagine this is a worry for other people that have experienced IVA, is the prospect of financial institutions sharing negative information on you that's held on their private records for longer than the statutory 6 years, which isn't reflected on your credit report but would likely affect any prospect of obtaining credit with the institutions in question. Does anyone know if this happens?

I suppose what I mean to say is, if you've defaulted with someone historically and they retain that record then I doubt you can go back to them, and if they were to share that information it could be very restrictive. I know I'm speculating and worrying but I'm just trying to understand the system and the potential obstacles. It's good to hear from others that have gone through, or are going through, similar situations.

Let's hope we can all come out the other side successfully in the end.

Foxy-Stoat_3

I think your worrying over nothing....I ended up owing Barclays £10k, my IVA achieved 35p in the pound and 8 years later I applied for a Barclay Card and they gave me a £11k credit limit straight away ! I only needed £2k so reduced it after a few months.

You will be fine if you dont spend more than you can pay back and never miss another payment.

UpToMyNeckInIt

...Good point Foxy: And I'm glad you mention Barclays. They are one of my creditors as well. But I hope to bank with them again post-IVA, because there is a branch on my doorstep.

But as YorkshireT touches on the subject, some creditors do keep their own 'credit history' on you. Santander is up to 20 Years for example.

Just when/if this comes back to bite us, only time will tell. But I think the best advice is not to let that concern you too much - it is a situation after all that you can do nothing about. Also, it is not like I have come across any forum posts detailing accounts of where this type of thing has happened.

YorkshireT

Thanks again, it's encouraging to hear.


It's hard not to worry about some of the long term consequences but I also feel like we are where we are - none of us intended to ever get into the situation where we had to resort to IVA (nobody would!) but we all have unique circumstances that probably caused it, and have learned lessons from it too. If anything it does at least represent an effort to resolve a difficult situation in an agreeable way so you hope that in the future you can rebuild your life from it.


This kind of discussion page is certainly a help to share thoughts and experiences with those that have experienced similar.


Until recently I had all but ruled out the prospect of ever owning my own house due to my past difficulties. But, having been constrained by the IVA for years, and readjusting afterwards, I'm in a situation where I now have an opportunity to save at a good level so it's good to think there may be a purpose for it at the end of it all.