An Individual Voluntary Agreement (IVA) functions as a legally binding arrangement between an individual in debt and the creditor to whom the debt is owed.
The primary goal of an IVA is to create a well-structured framework for monthly repayments, typically spanning a five-year period, with the intention of bringing greater control to the management of the debt.
An Insolvency Practitioner plays an important role as your representative, engaging with creditors to ensure the punctual and consistent fulfilment of payment commitments.
While having an IVA (Individual Voluntary Arrangement) can pose challenges when seeking a mortgage, it is not an insurmountable hurdle. If you find yourself in this situation, we strongly recommend consulting with a mortgage broker in Nottingham to explore the available options.
Engaging with a professional is paramount, primarily due to the terms and conditions outlined in your IVA agreement. When you commit to an IVA, you enter into various agreements that can impact your eligibility for loans, including mortgages.
These terms are typically in effect until you have successfully repaid all the outstanding debts. This cautious approach is reasonable, considering that IVAs are designed to help in financial management and ensure the consistent fulfilment of monthly repayments.
Taking on additional credit responsibilities may potentially jeopardise your ability to uphold your commitment to the IVA. Therefore, seeking guidance from a mortgage broker becomes essential to navigate the complexities and explore viable solutions tailored to your circumstances.
The primary consideration in an IVA is affordability. Creditors require assurance that you can sustain your repayments while also maintaining sufficient disposable income to cover housing and other essential living expenses.
Reaching the point of considering an IVA often implies a history of significant credit challenges. Obtaining a mortgage with an IVA in Nottingham might pose difficulties, given that mortgage lenders are typically cautious about lending to individuals deemed high-risk due to past credit issues.
In addition to assessing your credit history, lenders will scrutinise your disposable income. With an IVA, a substantial portion of your income is likely earmarked for debt repayment.
When combined with potential mortgage payments, there might be concerns about having sufficient remaining income to cover essential living expenses.
If you manage to maintain an adequate disposable income each month, there could be possibilities for securing a mortgage. As a mortgage broker in Nottingham, we recommend a strategic approach – consider allocating time to reduce a significant portion of your debt before exploring mortgage options.
For those contemplating moving home in Nottingham, it might be a good idea to wait until you’ve made substantial progress in repaying your debt before considering a new mortgage for another property.
While the temptation may be to dive straight into the mortgage process after settling your IVA, it’s a much better idea to assess your current financial situation thoroughly to ensure it aligns with your budget.
As seasoned mortgage brokers in Nottingham, our recommendation is to take a measured approach by focusing on rebuilding your credit score, accumulating a deposit, and carefully planning your move into a new home.
Affordability takes precedence in the home-buying process, and it’s important to confirm that you have the financial means for a mortgage. Our dedicated team of specialist mortgage advisors in Nottingham is ready to help you.
Even with an IVA, we can evaluate your mortgage affordability, explore suitable mortgage options, and tailor a solution that best suits your unique personal and financial circumstances.
If you’re ready to discuss your mortgage journey, feel free to connect with a mortgage advisor in Nottingham today. You can conveniently book a free mortgage appointment online or reach out to our team via phone.
Date Last Edited: January 30, 2024