Advice on finding a mortgage with a recently Discharged IVA

Frazzled10

Hello, I just need some help and advice please. My partner and I have found the house of our dreams, and on paper our affordability is good. However after having approached a couple of mortgage brokers (L&C and Trussle) have come up against a brick wall as I was only discharged from my IVA in February. Trussle have found one lender (Blue Mountain) who may be a possibility but the adviser has said it will take some leg work and arm twisting from their side. L&C seem to only recommend high street lenders and said the most favourable was Halifax but they wouldn't be able to lend us the full amount we require. Our position is that we are able to put down a decent deposit (26% of the house value), we have both been in our jobs for a long time and both earn a decent wage. Can anyone recommend any mortgage brokers who are more experienced with dealing with IVAs and have a higher success rate? Or has anyone else been in a similar experience but managed to get a mortgage? Any advice is welcome.

MovingForwards

You'll need to speak with a good independent whole of market mortgage broker, who has a good understanding of adverse credit history.

L&C like vanilla / straightforward cases as it's conveyor belt work they do.

Your IVA discharge will be too recent for mainstream lenders.

I can't find Blue Mountain but looked at my sub-prime lenders criteria, they require 3+ years post discharge and 30% deposit.

Frazzled10

Thanks @MovingForwards, we've got an appointment with Clever Mortgages on Tuesday who specialise in adverse credit mortgages so hopefully they'll come up with an option. 

K_S

Frazzled10 said:

Hello, I just need some help and advice please. My partner and I have found the house of our dreams, and on paper our affordability is good. However after having approached a couple of mortgage brokers (L&C and Trussle) have come up against a brick wall as I was only discharged from my IVA in February. Trussle have found one lender (Blue Mountain) who may be a possibility but the adviser has said it will take some leg work and arm twisting from their side. L&C seem to only recommend high street lenders and said the most favourable was Halifax but they wouldn't be able to lend us the full amount we require. Our position is that we are able to put down a decent deposit (26% of the house value), we have both been in our jobs for a long time and both earn a decent wage. Can anyone recommend any mortgage brokers who are more experienced with dealing with IVAs and have a higher success rate? Or has anyone else been in a similar experience but managed to get a mortgage? Any advice is welcome.

@frazzled10 L&C/Habito are unlikely to be able to help. Not necessarily because they don't have access to adverse lenders but because they don't have the time or experience to place a heavy-adverse case. I'm quite surprised that the Trussle recommended a lender, but good on them. I've not heard of 'Blue Mountain' though.

You've done the right thing by approaching a specialist lender. This is not a comment on Clever mortgages as I don't know anything about them but generally speaking just keep your eyes wide open with regard to fees as (ideally, if you have a choice) you want a structure which means the broker has some skin in the game - the bulk of the fee on completion or mortgage offer for example.

I've had clients with defaults/CCJs who were quoted silly amounts for moderate adverse of the kind that would fly with lenders like Aldermore, Kensington, etc.

Off of the top of my head, I suspect your deposit size might be borderline for the recency of the IVA as the couple of decent lenders that come to mind who may consider recently completed IVAs do so at 65-70% LTV. Hopefully you can avoid the likes of Norton who may consider even active IVAs (as long as it is settled at completion) as they will lend at 75% LTV but their rates and fees are eye-wateringly high.

Good luck!

Frazzled10

Thanks @K_S, some really useful info there 👍 Yep had read about some of the sky high fees that some specialist mortgage brokers can charge. Checked with Clever Mortgages when we had our initial chat re fees and they charge between £500-£950 which we can cope with if it means a chance of getting a mortgage. 

ACG

I suspect Blue mountain is actually Bluestone? 
Their criteria is 3 years discharged. They used to allow IVAs that had been discharged a day, but that went when Covid came. 

How long were you in the IVA for? 
How long have you been discharged for? 

It might be possible to get high street rates.
Failing that, with a 30% deposit, I think there are lenders who would do something around 3%. 

The IVA/Bankruptcy market tightened up when Covid hit. Its not quite back to where is was and with some bits I read yesterday, I am not quite sure we will get back there any time soon.

I do a lot of adverse and I have come across clever mortgages. I do not have any first hand experience with them nor do I know any brokers from there, but you would imagine they have a relatively decent idea of what is available and more importantly how to work with the specialist lenders as they are nothing like the high street lenders. 

Frazzled10

Thanks @ACG, the IVA was 5 years for which I complied fully and didn't default on a single payment. Discharged 15th Feb this year, I appreciate that's very recent. No other outstanding debt. 

ACG

If the IVA had started 6 years ago, I would say potentially normal rates. 

I dont think you will get a mortgage, unless as mentioned it is the likes of norton which will be pushing double digit interest rates. I reckon you would need a 40% deposit in order to get rates of around 6%. 

Even in the old days I think bluestone would have needed a 35% deposit. 

The fact clever are looking into it means they either have something I am not aware of (which is possible) or you have someone who doesnt know and is having to do the research. I would be interested to hear how you get on though, as much as I like to help people I also come on hear to try and learn. 

Frazzled10

@ACG I'll keep you posted 👍