How much can I borrow after an IVA?
Since the credit crunch, mortgage lenders are under much greater scrutiny than ever before, which means that the lending criteria is more rigid than it was. Your provable income is the foundation on which your ability to borrow will be based and via normal channels i.e. with high street lenders, it will typically be 5x your gross PAYE or self employed income.
Is it the same after an IVA?
The rules are basically the same post IVA in terms of income and affordability, however if the application is a complicated one because of your personal circumstances, the upper limit of what you can borrow may be lower. If you are self employed or someone who was recently been in an IVA, it’s a good rule of thumb to look at a figure that’s 4x your income.
If your partner, wife or husband also works, it’s important to know that their income can also be taken into consideration when applying for a mortgage. It may not be all be considered, but it will at least boost your gross income figure and give you more scope with lenders.
If this isn’t enough….is there anything else I can?
Well, if you’re applying to a high street lender, the answer is probably NO. However, that’s not the only option available to home seekers. High street mortgage companies don’t tend to allow other forms of income to come into the equation when working out what you can afford, so it’s good that specialist lenders often do.
At Niche Mortgage Info, we work with a carefully selected group of special mortgage brokers who have access to deals that allow your entire financial picture to be included in any decision. It could be that you need a company director mortgage or a company shareholder mortgage, that takes your annual dividends into account, including them in your total income.
Improving your credit rating
If you’ve only recently completed your IVA, then you’re most probably in the throws of beginning the journey to rebuilding your credit status. The longer it has been since your IVA, the more uncomplicated your application will become, as a general rule. The more you can do to improve it, the better your chances of getting a good mortgage deal with a niche lender. You can find out more about how to improve your score on our post IVA credit file cleanup page.