When it comes to applying for a mortgage, your credit rating is one of the most important factors that lenders will consider. It can be a make or break situation, and an Individual Voluntary Arrangement (IVA) can certainly have an impact on your credit rating. An IVA is a legally binding agreement between you and your creditors, where you agree to make regular payments towards your debts, usually over a period of five years. While an IVA can help you to manage your debts and avoid bankruptcy, it can also have a negative impact on your credit rating.
If you enter into an IVA, it will be recorded on your credit file, and will remain there for six years from the date it was set up. This means that any lenders you apply to for credit during this time will be able to see that you have entered into an IVA, and this may affect their decision to lend to you. Most lenders will see an IVA as a sign that you have struggled with debt in the past, and may be less likely to lend to you as a result.
However, it's worth noting that an IVA is not necessarily a barrier to getting a mortgage. While it may make it more difficult to find a lender who is willing to lend to you, it's not impossible. There are a number of specialist lenders who will consider borrowers with an IVA on their credit file, although you may need to pay a higher interest rate or put down a larger deposit. It's also worth speaking to a mortgage advisor, who can help you to understand your options and find a lender who is willing to work with you.
In summary, an IVA can certainly have an impact on your credit rating, and may make it more difficult to get a mortgage. However, it's not necessarily a barrier to getting a mortgage, and with the help of a specialist lender or mortgage advisor, you may still be able to find a lender who is willing to work with you.
If you're struggling with debt and considering an IVA, it's important to talk to a debt advisor who can help you understand your options and make the best decision for your circumstances. If you're looking to apply for a mortgage and have an IVA on your credit file, speaking to a specialist lender or mortgage advisor can help you to find a lender who is willing to work with you.
