What is an IVA?

An Individual Voluntary Agreement (IVA) serves as a formally binding agreement involving a person with debt and the entity to whom the debt is owed.

The objective of an IVA is to establish a structured framework for monthly repayments, usually spanning five years, aimed at making debt more controllable. An Insolvency Practitioner will serve as your advocate, liaising with creditors to ensure the timely and consistent fulfilment of payment commitments.

Can I get a mortgage in Sheffield with an IVA?

While an IVA (Individual Voluntary Arrangement) can certainly introduce challenges in getting a mortgage, it’s not impossible. If you have an IVA we always recommend speaking with a mortgage broker in Sheffield to find out what your options are.

You should always speak with a professional, and this is because of the terms of your agreement. When agreeing to an IVA you are signing many different terms and conditions that could affect your ability to take out a loan, such as a mortgage. These agreements will likely last until you have paid off all of your owed debt.

This approach is logical, IVAs are put in place to help you manage your finances and maintain monthly repayments. Taking on additional credit responsibilities could potentially jeopardise your ability to honour your IVA commitment.


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Is an IVA right for me?

The main factor in an IVA is affordability. Creditors need to know that you will be able to maintain your repayments but also have enough disposable income for housing and other essential living expenses.

How does an IVA affect my mortgage application?

To have reached a point where you need to take out an IVA, you will likely have bad credit in Sheffield. As such, you may find that taking out a mortgage with an IVA in Sheffield may prove to be challenging, as a mortgage lender will be hesitant to lend to someone who they would consider high-risk.

The lender will also need to make sure that you have enough disposable income left over. With an IVA, a large amount of your income will likely be used towards paying off your debt, and when combined with mortgage payments, you may not have enough remaining to get by each month.

If you have enough remaining disposable income each month, it may be possible to obtain a mortgage. As a mortgage broker in Sheffield, we suggest that you take some time to repay a large portion of this debt and then think about applying for a mortgage.

If you are looking to move home in Sheffield, perhaps waiting until you pay off your debt would be a matter move before taking out a new mortgage on another property.

Can I get a mortgage in Sheffield after an IVA?

Even though you may want to jump straight into the mortgage process as soon as you pay off your IVA, it may be wiser to take a look at your current financial situation and make sure that it is within your budget to take one out.

As a mortgage broker in Sheffield, we recommend taking time to rebuild your credit score, save up a deposit and plan for your move into your new home. Affordability is key when it comes to buying a home, you should be adamant that you have the funds for a mortgage before taking one out.

Our specialist mortgage advisors in Sheffield will be more than happy to take a look at your mortgage affordability with you, even with an IVA. We can take a look at your mortgage options and work out what is best for you and your current personal and financial situation.

You can speak with a mortgage advisor in Sheffield today. Simply book a free mortgage appointment online or give our team a call.

Date Last Edited: February 28, 2024