Individual Voluntary Arrangement Mortgages
People with large debts sometimes don`t know where to turn or what kind of solutions are available to them. Many with debts of over £15,000 fear bankruptcy is the only option to take to rid them of debt.
Bankruptcy severely affects people's chances to obtain any future credit, as-well as job opportunities and the ability to start a business. For this reason bankruptcy is considered a last resort. Individual Voluntary Arrangements (IVA) can help to sort out you finances without the stigma of bankruptcy hanging over you.
IVA`s work by reducing your monthly payments to creditors, placing all of your payments in to one more manageable sum better suited to your financial situation. This is then offered to creditors who will choose whether to accept this new offer. In these situations, bankruptcy is usually the only other option; this influences creditor's decisions as it guarantees them some or sometimes all of the money owed.
An IVA is also a good option to take for people who are looking for Individual Voluntary Arrangement mortgages or re-mortgages as the terms do not affect you applying for mortgage.
Individual Voluntary Arrangement Mortgages
Looking for and finding Individual Voluntary Arrangement mortgages whilst still within the term of an IVA can prove very difficult but not impossible. Listed are some of the reasons that make it a struggle:
- An IVA stays on your credit rating for six years and with some creditors even longer.
- You will been seen as a high risk borrower, making it hard to find someone to provide an Individual Voluntary Arrangement mortgage
- Due to your financial history you will be subject to high interest rates making monthly repayments higher than the average.
You can contact a sub-prime Individual Voluntary Arrangement mortgage broker to search out specialist lenders and find the best possible rates available. Brokers are the best way to seek out a good rate however they do charge a fee for their services and this can sometimes be expensive. If you don`t want to pay for a broker you could always contact potential lenders directly, this could be very time consuming.
It is always best to apply for a mortgage after the Individual Voluntary Arrangement has ended, you can then prove your finances are back on track and slowly build up your credit rating. Ideally you should put as much time as possible between your mortgage application and the IVA ending.
Individual Voluntary Arrangement Re-mortgage
If you are already a home owner with an on-going IVA, re-mortgaging could be a good idea to release equity that can be paid towards creditors. A broker would once again be an option to find a good deal to suit your situation. Taking out an Individual Voluntary Arrangement mortgage does not have to be a lifetime commitment; it can be used as tool to get your finances back on track and as your credit rating begins to rise, you can apply for a new rate and reduce the monthly repayments.