Mortgages with Individual Voluntary Arrangements (IVAs)

As peoples debt increases in the UK, more are turning to Individual Voluntary Arrangements as a means of solving their debt problems. These are long term solutions as an IVA lasts for usually five years and then remains on a credit record for six years after the IVA has been completed.

With an IVA as opposed to bankruptcy, you don't need to sell your home as a means of paying your debts. Your mortgage is a priority debt and is not included as disposable income. An IVA shouldn't affect your mortgage as long as you continue making the payments.

If there is equity in your property at the beginning of the IVA then at the end of the term of the IVA a 75% share has to be paid into the IVA for the benefit of the creditors. If there is no equity in the property then a valuation has to be done towards the end of the term and 75% of the equity at that time is paid into the IVA.

It is still possible to get a mortgage or remortgage if you are in an IVA or have recently had one. Lenders will consider you a high risk and therefore you will pay higher interest rates with an IVA Mortgage. The larger the deposit you have the better or the longer you can leave it after the IVA has been completed to when you apply for a mortgage will give more time for your credit rating to improve.