How do people with property manage to get mortgages when they are in an IVA?
After all, isn’t an IVA supposed to stop people borrowing more money?
Well, it is true to say that one of the conditions imposed by an IVA is to restrict the debtor from entering into further credit agreements, such as credit cards, loans or store cards, but that restriction doesn’t extend to their mortgage product.
Being in an IVA will have an impact on the type of mortgages avialable, and quantity of mortgage products available, for you to choose from, and therefore you will find the products themselves are less competitive than standard high street mortgages.
You will find that secured lenders, like mortgage companies, use a very different borrowing criteria to those used by unsecured lenders.
Mortgage companies have the ability to modify the terms of their borrowing criteria to reflect the potential risk the are exposed to, should it be that the borrower is not be able to pay back their loan.
So secured lenders will have several products, or mortgage packages, each of which reflect their perceived risk.
The higher they feel the risk is, the higher the interest repayments will be, and also the lower the ‘Loan To Value’ (LTV) ratio will be too.
The LTV is the amount of money a lender will consider the maximum level they are prepared to release, expressed as a percentage, against any property’s value.
Mortgage companies will use credit reference agencies to establish their risk, and will be able to see when a potential client is in an IVA. So it very important to select the correct mortgage product before hand, by making sure you are applying for a mortgage package available to people in an IVA. Otherwise you stand a significant chance that the application will fail.
Because My IVA Adviser has been looking for mortgages for IVA clients for so long now, we have built up a network of lenders with specialist IVA mortgage products available.
For full details call 0800 088 7503 or simply leave your contact details on the form at the side of the page.
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