First time buyer with an IVA

kazgil

I had bad debt problems, over £30k that I ended up in debt management for (I beleive it was called an IVA but have only recently heard that terminology).

My debt has successfully been cleared for 3 years

and have some how managed to save a 5% deposit. Living in London a 5% deposit is quite a feet. I approached my bank and they advised my IVA has to have been cleared 6 years before they will consider me for a mortgage.

Are there mortgage companies that will give me a mortgage with a 5% deposit?

HELP please oh wonderful gurus of MSE!!

ACG

Is it an IVA or a DMP (Debt management plan)?

The answer will make a massive difference on the likelihood of getting it through.

jamesd

The difference between a debt management plan and an Individual Voluntary Arrangement can be substantial. You need to know for certain which it was. One key difference is that an IVA is a form of insolvency, somewhat similar to bankruptcy, which is the best known form of insolvency. That means in part that in an IVA lenders who did not agree can be forced to accept it, including being forced to accept losing some of their money, if the majority of those by value accept it. In a DMP it's voluntary for everyone, even if some agreeing to write off some of the debt happens.

Both a DMP and IVA are bad for getting a mortgage but IVA is the worst of the two.

A mortgage with a 5% deposit is high risk for a lender. Lending to a person with either IVA or DMP in the last three years is also perceived to be higher risk but your chances with a DMP are better than with an IVA.

You'll need to wait for the mortgage brokers to comment to be sure, though.

Mortgage_Mark_2

95% LTV with either a DMP or an IVA?

Forget it.

Senior_Paper_Monitor

I'll go with Mark on this - not even worth researching for a couple years and/or considerably more deposit available

ACG

I disagree, with a DMP I think this is possible to place (depending on the details and the rest of the case).

An IVA on the other hand I would agree and knock it on its head until you can get to 15%.

Mortgage_Mark_2

ACG wrote: »

I disagree, with a DMP I think this is possible to place (depending on the details and the rest of the case).

An IVA on the other hand I would agree and knock it on its head until you can get to 15%.

I don't think you'd get any lender to accept a 3yr old, £30k DMP at 95%.

The only lender I can think of with a combination of 95% lending and adverse credit is Aldermore but IVA is a straight no within 6yrs, defaults possible after 3yrs but unlikely that they will go with as many as you will find on a DMP (it isn't just going to be one, clearly!).

ACG

There are 3 lenders who it would fit criteria with, 1 of which I think would probably decline it outright, the other 2 I would be slightly more optimistic about. I certainly wouldnt rule it out at this stage.