Mortgage after Bankruptcy or IVA
Many people I speak too are delighted to find that after talking to me they qualify for a mortgage having been made Bankrupt as they have assumed they would have to wait 6 years until it no longer appears on their credit file.
The saying 'time is a great healer' is never truer than when applied to getting a mortgage if you have an adverse credit history as the longer the period of time from when you were discharged from Bankruptcy, the better your chances are of getting a mortgage and being able to borrow more.
How much could I borrow?
- After 1 day of being discharged - 60% loan to value
- Discharged over 1 year - 65%
- Discharged over 2 years - 70%
- Discharged over 3 years - 85%
- Discharged over 6 year - I would look to find you a mortgage with a High Street lender as the rates and fees they charge would be lower than going to a specialist adverse credit lender.
Having an IVA is slightly different to being made Bankrupt as the majority of lenders will still insist the IVA is cleared but I know of a lender who will lend even if you are still in the IVA providing the payments have not been missed and paid on time.
How much can I borrow if my IVA is cleared?
- 95% if the IVA started over 6 years ago (H2B)
- 90% if the IVA started over 6 years ago - standard purchases
- 75% Satisfied or satisfactory conducted for +36 months.
- 70% Satisfied or satisfactory conducted for +24 months.
- 65% Satisfied or satisfactory conducted for +12 months.
Remortgage to pay off an IVA
If you have equity in your home, you could remortgage to clear your IVA early by offering a reduced settlement amount to your creditors. This could be quite a saving to you if your creditors are willing to accept a lower lump sum amount up front, instead of waiting 5 or 6 years to get their money.
It also has the added benefit that your credit rating starts to improve quicker as you would no longer be in an IVA.
Governments Help to Buy (H2B) scheme - borrow up to 95%
I have a lender that will lend up to 95% on the H2B schemes offered by the Government so you would only need a deposit of 5%. This includes H2B 1 & 2 scheme and can be for homemovers or first time buyers. Bankrupts and IVA must be over 6 years old.
If you would like more information about Bankruptcy and IVA then the Citizens Advice Bureau has a very good website at www.adviceguide.org.uk as does the Governments at www.gov.uk for Bankruptcy information or www.gov.uk for IVA information.