Can you get a mortgage with an IVA?

Written by David BourneMortgage & Protection Adviser · Firm reference 988277

What an IVA is, in a lender's eyes

An Individual Voluntary Arrangement is a formal, legally binding agreement with your creditors to pay all or part of what you owe, through an insolvency practitioner. It is recorded on the Individual Insolvency Register while it runs and taken off three months after it ends, according to GOV.UK. Your credit file is a separate record, and the IVA normally stays there for six years from the date it started.

To a lender, that makes an IVA a formal insolvency event, closer to bankruptcy than to a few late payments. That is why it narrows the field. It is not why it closes it.

If the IVA is still running

This is the narrow case. You will usually need your insolvency practitioner to agree, because the arrangement was built on your current income and outgoings, and a new mortgage changes them. Few lenders will look at a live IVA at all, and those that do tend to want a long, clean payment record in the arrangement and a meaningful deposit.

If you are remortgaging rather than buying, the conversation is different again, and it often starts with your insolvency practitioner rather than with a lender.

If it has finished

This is where most people who ring me are, and it is a much better position. What lenders look at: when the IVA completed, whether every payment was made, whether anything has gone wrong since, and how long remains before the entry drops off your file. Several lenders will consider a case well before the six years are up, particularly with a reasonable deposit.

One question I always ask: did it complete, or did it fail? A failed IVA, and anything that followed it, reads very differently from one that ran its course.

The one document to find now

Your completion certificate. Your insolvency practitioner issues it when the arrangement finishes, and lenders routinely ask for it. Because the register entry disappears three months after completion, the certificate is the only thing that proves the IVA is over rather than simply missing. If you cannot find yours, ask for a copy before you need it.

What I would do

Pin down the start date, the completion date and what your file shows today, across all three agencies. Then go to the lenders whose rules fit that timeline, rather than applying to see what happens and adding a decline to the record. If it is too soon, I will tell you, and roughly when it will not be.