IVA Mortgage Advice

mactcatfootball · 16 September 2019 at 8:33AM

Morning All,

I'm looking for some advice or examples of your own experience with the below scenario.

I completed my IVA in December 2018 :beer: and it has been showing as settled on my credit report since March 2019. I have managed to get all my default dates aligned with the IVA commencement date, so come 28th December 2019 my credit file will be squeaky clean.

My wife and I are looking to buy asap in 2020 and have managed to save up a 10% deposit. Having spoken with a broker, we are confident of securing the required mortgage in principle. However, we are under the impression that this will not relate specifically to an available mortgage product/interest rate.

We have been told at this point, we would need to identify a property we like, make an offer, then speak to the lender again to see what interest rate/deposit level they are prepared to lend to us based on. This is a concern, as a jump in interest rate/deposit could make it impossible for us to continue with the purchase, as it will simply price us out.

This will make it extremely difficult to know what price of property to aim for. Has anyone else had experience of this, or are there any brokers on here who may be able to confirm whether the above is an accurate scenario for us to expect.

I'll be very grateful for any advice.

Thanks :-)

mwarby · 16 September 2019 at 6:28PM

I was able to get a 90% mortgage post IVA, and I'm in Scotland which restricts number of lenders

One thing I found is that some lenders are interested in time since IVA started, but many are more interested in the end date(you'd be obliged to tell them, they will almost certainly ask)

Hope this helps

mwarby · 16 September 2019 at 6:45PM

Re the specific property, most likely and variation in rate will be down to the valuation taking you above 90% LTV, or an unusual construction or flat above shop etc ruling out a lender

mactcatfootball · 17 September 2019 at 10:08AM

That’s great, thank you. So were you still able to access mortgage products as advertised? As opposed to the lender coming back for example and saying, ‘due to your IVA that rate is not available, and you we will only lend at a higher interest rate’.

Thanks again

mwarby · 18 September 2019 at 6:52AM

In my case it was Skipton through a broker and as far as I know all the rates were open to me (providing I wasnt wanting more than 90% LTV). There was a bit of a rush needed to secure one rate, as there was talk of base rate moving, but this wouldn't have just been me.

One thing the broker did make clear was that 95% LTV wouldn't be an option, which for most lenders is anything ore than 90% LTV. Being in scotland we had the valuation in home report, which is what the lenders use, so we knew the LTV. In England you do have the fun of not knowing valuation until you apply

foxy-stoat · 23 September 2019 at 10:41AM

mactcatfootball wrote: »

We have been told at this point, we would need to identify a property we like, make an offer, then speak to the lender again to see what interest rate/deposit level they are prepared to lend to us based on. This is a concern, as a jump in interest rate/deposit could make it impossible for us to continue with the purchase, as it will simply price us out.

You can get a AIP at any time with any lender - the final details of the property will give you an actual mortgage offer.

Speak to another whole of market broker - one that has placed a few ex-iva'ers recently at this level and go from there.

You may struggle @ 90% LTV on a new build though.

ACG · 24 September 2019 at 8:54AM

As mentioned above, most lenders work off the date the IVA finished, so in their eyes you will only have 1 year clear.

There are a few who will work off the date it started. It sounds like your broker is going to small building society who prices their products based on risk. Whilst the broker can not give you an exact rate until your application goes in, he can at least give you a best case/worst case scenario.

hereshoping34 · 21 February 2021 at 2:59PM

mwarby said:

I was able to get a 90% mortgage post IVA, and I'm in Scotland which restricts number of lenders

One thing I found is that some lenders are interested in time since IVA started, but many are more interested in the end date(you'd be obliged to tell them, they will almost certainly ask)

Hope this helps

Hi @mwarby

what broker did you use? I am also from Scotland but I am having no luck. Any information will be appreciated

IVA Mortgage Advice

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