Why is IVA legit for credits? Know more!
IVA, or Individual Voluntary Arrangement, is a legal agreement between you and your creditor, who has lent you the money. The sole purpose of this agreement is to make sure you clear your debt within a period such as 5-6 years.
Although you can get IVA for lots of different reasons. but the majorly these agreements are set up to repay debts you might have after getting bankrupt –
- Bank overdrafts
- Credit cards and store cards
- Council tax arrears
- Funds owed to HMRC
- Personal loans
- Catalogue debts
- Hire purchase debts
However, no other than an insolvency practitioner can arrange an IVA for a person. During the process, you and your creditor will agree to a payment plan per your current financial situation and how much you can quickly pay in instalments. This IVA agreement or IVA Mortgage lenders prevents you from falling into more debt because most creditors freeze the interest on the loan. As a result, you won’t be charged with build-up interest. Also, it keeps the process transparent and gives enough clarity to both parties on what he has paid until then.
All the payments made under Individual Voluntary Arrangements are monthly but can be lump-sum payments under some circumstances. The best part of having IVA is – you can make all your payments with affordable and easy-to-pay instalments. With the end of the agreement, you won’t owe any more money to pay the creditor.
Usually, when a person is on IVA, he is unlikely to get another mortgage. And if the person has a mortgage at the time of bankruptcy, it will be included in the IVA.
Most of the time, Bad credit mortgages are for those struggling with poor credit histories. If you plan to purchase a house with a low credit score, either wait for some time and increase your score or contact a lender providing mortgages. Although it all depends upon your credit report or the circumstances, a bad credit mortgage or IVA mortgage can be an excellent option for you if you cannot wait.
Can I apply for a mortgage on IVA?
Here, “IVA mortgage” refers to applying for a mortgage loan even after IVA or Individual Voluntary Arrangement shows in a credit report. Although getting a new mortgage after IVA is impossible, you will need a specialist mortgage lender if you still require it. At Swift, we have an extended team of specialists and experts who share years of experience handling these complex cases. We share a good working relationship with specialized IVA Mortgage lenders willing to know your circumstances and make a flexible decision in your favour.
These lenders have a wide range of products that can efficiently work for people presently running on IVA or previously have been.
Does IVA affect the mortgage application?
Now that you know it’s possible to have a mortgage on IVA, it isn’t easy at times. It can have a profound effect on your IVA mortgage application. Always remember the primary responsibility is to pay the IVA and clear your present debts. Even if the process has some restrictions, it only ensures that your available money is only used to remove your debt respectively. But if you do obtain a mortgage after IVA, you may first require agreeing to all the terms & conditions. And agree to release the equity towards the end of IVA.
Additionally, various factors may affect the application process like – the amount of money you can borrow, fees you will pay, or at what interest rate you will get the money.
- Disposable income
Here IVA will directly affect your application and only allow a limited amount of money to be borrowed. If you are applying for a mortgage, lenders will consider your disposable income and estimate whether you can afford a mortgage. If you are taking a mortgage, the IVA Mortgage lenders assume that most of the disposable income goes into the IVA. For example, if you are paying rent, the amount you are paying as rent will be the best indicator of what amount you can afford in terms of mortgage repayment.
Although getting a mortgage with VIA is complex, an insolvency practitioner or specialist mortgage lender can significantly help you. And if you wonder where you can look for these experts, you can contact a reputed company like Swift to have a transparent IVA mortgage process. It’s a bit difficult for a bankrupt to live up to the trust, but Swift s here to support you throughout the process and ensure that you are debt free as soon as possible. With such an experienced and trustworthy firm, you can be assured that your money is safe and used in your favour.