Applying for Mortgage during an IVA

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(This is something that would also fit over on the Mortgage board so I have also posted it there)

My wife and I are currently about 2.5 years into our IVA. We have been fortunate enough that a third party individual has offered us a private loan equal to the cost of a mortgage deposit.

My brief research tells me that there is nothing to stop someone from getting a mortgage whilst on an IVA though the reality of being accepted for one is less likely. I also know that a mortgage that is offered is likely to have a larger interest rate and deposit.

My questions are:

-Does anyone know what this deposit percentage would be likely to be (approximately)?

-Has anyone else successfully done what I am proposing?

-Does anyone have any suggestions, tips etc around this?



Thank you in advance for your time.

Annie35

Annecdotally I've read 20% & about 4 years post insolvency. (From BR threads so could be different with iva thou??)

Your other issue will be the unlikelyhood of a mortgage co accepting a loaned deposit (will certainly impact 'affordability' IF you can get an offer) this is a big hurdle just for solvent applications.

Best speaking to a whole of market broker who specialises in problem cases & getting them to do the leg work.

It would be nice if you do get a result, let us know anyway

Clive_Woody

I'm pretty sure that mortgage lenders will not lend money to people who are using a loan as a deposit, effectively there would be no equity in the house as you would owe 100% of it's value as a debt so if anything went wrong they would have nothing to cover costs.

A4445

I work with Mortgages and it would be a no while an IVA is in place.

Also no for using a loan as a deposit.

Sorry it’s not better news.

letitbe90

Assuming you qualify for a mortgage, the third party would have to sign a gift deposit letter saying the amount isn’t a loan and that have no interest in the property. As others have said, they won’t allow it if it is a loan.

The solicitor (and possibly lender) will also require proof of deposits, aka how the amount was made up - will generally involve bank statements or otherwise.

You sure your third party happy to do that?