IVA Mortgages

Introduction to IVA Mortgages

An IVA is an individual voluntary arrangement that someone who is not able to pay off all of their debt is able to make with their creditors. IVAs were established and maintained by the Insolvency Act of 1986 and were created to give debtors and creditors an alternative to bankruptcy. During the IVA process, all of the creditors will come together at a creditor meeting to try to all agree on the terms and conditions of this agreement. The creditors will look at your finances and try to get as much money from you as they feel you are able to afford. Their goal is to lose as least money as possible by making your payment as high as possible.

Once an agreement is made, it is the debtors job to make sure that the agreed upon monthly payments are made each month. It is important to be sure that the monthly payments are paid each month and you don’t get behind because the terms of the agreement. If you do get behind, you risk the chance of having the agreement voided and you will probably have to go to bankruptcy court, which will just add more costs to what you already have in debt.

Mortgage in IVA

After you have an IVA done, it will become part of your credit record for at least six years making you look like a high risk candidate. Most IVA payment agreements are for around five years but can be longer or shorter depending on your specific circumstances. During this timeframe receiving loans much less any of the IVA mortgages are very difficult though not impossible. There are several factors that must first take place before you would be considered for any of the IVA mortgages.

First, you must be up-to-date on your IVA payments and should not have missed payment for any months since the agreement began. You will also need to show that you do not have any other large outstanding debts or loans that you are paying on. Generally, receiving any of the IVA mortgages during your IVA period is frowned upon and you must be able to show that you have made a substantial change in how you pay your debtors.

Second, you will need to show an increase of income to show why you could not afford to pay off your creditors but now you want any of the IVA mortgages. If your income has significantly changed since your IVA payment was arranged this should be enough proof but if not you will need to explain why things are different now. You may be able to show that your expenses were greatly reduced and that they will be staying at that reduced level.

Third, you should wait as long as possible after your IVA payment arrangement was made to consider applying for any of the IVA mortgages. This will give you a better track record when they start looking at your finances. A few good years with good credit can go a long way. If at all possible you should try to pay your entire IVA payment off and then this will end your debt to all of your creditors and put you in a better position.