can i get a mortgage if i got a iva

[leigh.m]

can i get a mortgage if i got a iva

[LoneRanger]

Hi Leigh and welcome.

I think this has been mentioned before. It was said that you would probably need a deposit of 20% in the current market and you wouldnt get the best rates. Your IP must allow it and it must not affect your abilty to make your regular IVA payments.

[MelanieGiles]

It is very difficult now for people to get mortgages whilst they are in IVAs, and I think that there are only a couple of lenders who will provide such funding at present. Your Supervisor will have to provide confirmation that your payments are all up to date to be considered for a mortgage.

[pbeck]

Leigh

If you are thinking of buying a house during the term of your IVA, forget it. As has been said, you would certainly need a deposit, the interest rate would be high, and your IP would certainly want to know where you got your deposit from as they might claim it for the IVA. You certainly wouldn't have enough residual income left during your IVA to save up for a deposit by yourself.

If you are remortgaging a house you already own, that shouldn't be a problem. IVAs these days require homeowners to remortgage up to 85% of the value of their house in the final year, and there are mortgage companies that specifically lend to this market. Don't expect high-street rates, but you will be able to find a mortgage offer.

[MelanieGiles]

If the deposit monies are coming from a third party (which could not be claimed for the IVA), and this can be demonstrate to your IP, property ownership in IVAs can still be possible providing your mortgage payments are similar to that you are currently paying in rent.

Philip - can you tell me which companies you know of which offer 85% LTV to potential IVA customers. The specialist brokers I use have been unable to find one at more than 80% and then only from a handful of lenders with really tight conditions. Would be interested to know if you know of any.

[pbeck]

Melanie

I have to confess that I haven't looked recently as just of late none of my IVAs have been in the remortgage phase. Normally I get clients to find a broker themselves ,where they've had difficulty I've referred them to Tudor Mortgage and Finance www.tudormortgage.co.uk .

[MelanieGiles]

Thanks Philip - I will check them out. I have lots of clients at the moment struggling to comply with the fifth year equity release clause, and whilst that may be good news for them, we do need to ensure we have fully explored the marketplace to ensure compliance from a creditor perspective.

[Andrew Graveson]

As you can imagine I've got a bit of an interest in this topic!

I am aware of four mortgage "brands" still serious about lending money for mortgages to those in IVA's. To my knowledge none are offering more than 80% LTV.

Two of these brands are actually part of one larger organisation. I bumped into one of their senior managers at a conference last week and arranged to speak with him and one of the senior underwriters in their team this week.

My point that I wanted to convey was that a simple "an IVA is an IVA" approach to mortgage lending was to miss a major opportunity. In my opinion a commercially minded lender would potentially do well if they had the appreciation that many people in IVA's have entered into an IVA with the rentention of their home as a prime priority. With a faultless IVA and mortgage payment record the credit risk to a lender is probably lower than for someone with a moderate level of unsecured debt who is managing currently to maintain minimum payments outside of a debt repayment arrangement.

The individuals with whom I was speaking were very open in their response. They understood and appreciated the point but felt it would be extremely difficult to justify further exploration of this market when they are under huge pressure from their funders to control the perception of risk. It's not much fun being a mortgage broker right now, nor is it much fun being a mortgage lender.

The key points are:

1 - There are still mortgages available if you are in an IVA. The criteria are stricter than six months ago but the market exists.

2 - If you're an IP struggling with compliance when equity release isn't possible a good mortgage broker with a long-term view will be able to provide documentation confirming this for your file.

3 - If you're struggling to confirm to your IP that equity release isn't possible a good broker can help you to confirm this.

On the plus side I now have a telephone number into a specialist department within this lender and a commitment to seriously discuss cases that fall just outside of their normal lending criteria where the arrangement makes good sense for the lender and borrower.

[MelanieGiles]

That is such helpful advice Andrew - particularly on the independent confirmation that a client has done the best to comply with equity release.

It is this sort of advice which makes your firm stand out from the crowd - you really do understand both the mortgage and the debt industries - and that is so useful to an IP in today's climate.

I suggest that you prepare to be busy!