How to Get a Mortgage When Your IVA is Older Than Six Years and Settled

Updated: Aug 31

It’s a fantastic feeling; your IVA is settled, it’s been more than six years, and you’re almost home free. Certainly, it should be a lot easier to get a mortgage now. However, when you’re in this position you still have a couple of hoops to jump through. If you don’t follow the IVA mortgage rules in this article, you could find that getting a mortgage isn’t as easy as you think.




Why it may not be easier to get a mortgage now that your IVA is settled.

If you have settled your IVA and it has been more than six years since it was set up, the record of your IVA and your debt defaults will have fallen off your credit report. You’d think that this would make it a breeze to get a mortgage, but unfortunately, this is not the case.


All lenders have their own rules when it comes to deciding who to give a mortgage - many insist that your IVA must have been settled for six years for you to be eligible for a mortgage with them. Some, such as Santander, will never give you a mortgage, even if your IVA was settled years ago and your credit record has been impeccable ever since.



Why applying for a mortgage could make it more difficult to get a mortgage!

Most likely, a lender won’t tell you that they won’t lend to you until after you have made the application. Every time you apply for a mortgage or other credit, it marks your credit report and can negatively impact your credit score.


When a lender declines your application, it acts as a big red flag to other lenders, regardless of why you were declined - they don’t want to know why, nor do they care why (stupid lender rules!). All that they know is that you were declined by another lender, and that’s bad enough for them to decline you too. Now you have two red flags on your credit report. See the pattern?



Should you tell a lender that you previously had an IVA?

This is a question we get asked a lot. The answer? Yes.


On a mortgage application form, most lenders will ask if you have:

  • Had an IVA in the last six years

  • Ever had an IVA


You must answer truthfully. If you lie, it could put you in some serious trouble down the line - you may find that other lenders suddenly refuse to extend any credit to you. Some lenders keep their records for more than six years, and they ofter share data with other lenders. Lie to one, and you lie to all.



What you must do to make getting a mortgage after an IVA easier.

Once you’ve settled your IVA and it’s not been more than six years since it started, there are three things you need to do to make getting a mortgage easier:



1. Build your credit score

In order to get the best mortgage when you’ve had an IVA, you must check and amend your credit report. Here are the steps you should take to do this:

  • Order a credit report online (it’s free!)

  • Check that you are on the electoral roll, and that your address is correct

  • Delink any previous partner’s credit report

  • Amend incorrect default dates

  • Always pay your bills on time

  • Don’t go overdrawn on your current account (or exceed an agreed overdraft limit)

  • Avoid bad credit, and especially payday loans

For more tips on building credit, read 9 tips to help improve your credit score.


2. Pay as large a deposit as you can

You will have to pay a deposit, usually of at least 10%. That would be £15,000 on a house worth £150,000. But here’s the thing - the larger a deposit you pay, the better it is for you in the long run.


Here’s why:

  • The lender views borrowers with larger deposits as less risky. There is less chance of you falling into negative equity should property prices drop.

  • You will have lower mortgage payments to make since your loan is smaller. There will be less reliance on overtime, bonuses, commissions, or a partner’s income. Again, less risk for the lender.

  • The larger a deposit you pay, the lower the mortgage rate is likely to be, since you’re not such a big risk to the lender.


This all adds up to one very big reason for paying as large a deposit as you can raise (or save): the larger a deposit you pay, the better your chances of getting a great mortgage deal are.



3. Use a specialist mortgage advisor

Last, but not least, use a mortgage advisor who specialises in the IVA mortgage market. They know the market, and they will stay up to date with each lender’s rules. They know who to approach in every circumstance, and which lender is currently offering the best rates for borrowers with settled IVAs.



If you have recently settled an IVA and you’re looking to get a mortgage, contact Mortgage Thoughts today. We’ll guide you through the process of getting the best mortgage now that it has been more than six years since your IVA started. You’ve worked hard to settled your IVA, and we promise to work hard to get you the best mortgage.




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