Hi cde and welcome to the forum
You will be able to get a mortgage whilst in an IVA, following is a section from my blog on the subject:
Will I be able to obtain a mortgage (buy a house) whilst I am in an IVA?
Yes, people in an IVA can take out a mortgage and contary to popular belief an IVA will not necessarily have a massive adverse affect on your application. If you are considering taking out a mortgage whilst in an IVA there are some pitfalls to watch out for and a few points to remember. First and foremost; you will need the permission of your Insolvency Practitioner (IP).
Your credit worthiness
It is unlikely for you to be able to walk into any high street bank and obtain a mortgage, you will need to seek the advice of a mortgage broker who specialises in adverse credit lending. This does not automatically mean that you will have to pay higher rates than a high street mortgage, although the mortgage products and therefore rates available to you, will be based on your wants, needs and circumstances. You will be unlikely to obtain a mortgage if your IVA has failed (shown on your credit file).
Your deposit & other fees
It is reasonable to assume that people in an IVA do not have large levels of savings, and therefore putting down a deposit or paying fees which can not be included into the mortgage could be difficult. This does not mean that it is impossible. It may be that a family member or a friend is able to help by lending or giving you the deposit. This is acceptable, in most cases, but it can cause complications. The person providing the deposit should consider protecting their money from creditors, through a “Deed of Trust”, (if a relative or friend lent you the deposit to buy a property. The very fact that a deposit was paid builds equity into a property, and adds to a possible rise in value, the opportunities for creditors to extract extra funds through a re-mortgage are increased. To reduce some of this risk it may be possible to protect any deposit from a third party through a “Deed of Trust”.) This is a legal document drawn up to protect any money, provided by a third party, from the creditors. The other fees to consider are stamp duty (if the house price exceeds certain limits), solicitor’s fees, valuation fee, the brokers completion fee and on some mortgage products require a lenders arrangement fee.
The monthly repayments
Repaying a mortgage in an IVA is acceptable, as long as it does not diminish the regular monthly repayments into your IVA. What this means is; if your IVA repayment is £350 per month and your accommodation costs are currently £700 per month, it should be acceptable to creditors for you to purchase a property as long as it costs no more than the £700 per month you currently pay, and therefore does not reduce the amount you are able to offer towards your IVA. If however, the cost of the mortgage was £750 per month, then your ability to pay £350 per month into your IVA would be reduced by £50 per month and would probably not be acceptable to creditors.
FREE ADVICE IS THE BEST ADVICE
LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.
see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf
