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Joint mortgage with an IVA

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Feb 8, 2023

Can I get a joint mortgage with an IVA?

Your partner has good credit, but on the other hand, you have an individual voluntary agreement (IVA) in place, which translates to bad credit. At this point, you’re considering applying for a joint mortgage and wondering whether you’ll get approved.

An IVA is a legal agreement between a debtor and their creditors to freeze penalties and interest and pay back all or part of the monies owed over a specific timeframe. For the duration that an IVA is in force, you are prohibited from taking on any new debt until the agreement terms are fulfilled.

The term “individual” in IVA means that the agreement only affects the debtor. If your partner has good credit, your poor credit history has no bearing on theirs. With that in mind, you might ask – Can I get a joint mortgage with an IVA? This guide explores this subject in depth. Read more.

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Can I get a joint mortgage with an IVA?

Most high street lenders will not even consider your joint mortgage application if one applicant has an active IVA in their credit history. On the other hand, niche mortgage providers specialising in bad credit lending may be willing to grant you a property loan if you meet their criteria.

With that in mind, can you get a joint mortgage with an IVA? The answer is yes, but it may not be as straightforward as you think, even if one of the applicants has good credit.

An IVA on your credit record will be visible to prospective mortgage lenders for six years from the date it was initially registered. You could wait until this period elapses and then gradually rebuild your credit history. If that’s entirely too long for you to wait, and your partner has good credit, it would be easier if they applied for the mortgage themselves.

If you prefer to have both of your names listed on the mortgage, you can opt for a joint application through a specialist lender that deals with this. They have a high-risk appetite and would be willing to assess your application. They’ll review your IVA terms, assess your and your partner’s credit history, do a loan affordability assessment, and then give you a mortgage offer based on their findings.

It is worth noting that these niche credit providers are few and far between. You need to go through a bad credit mortgage expert with insider knowledge of the adverse credit lending market. They’ll put you in touch with a mortgage lender that will most likely approve your mortgage application, despite the credit score and credit report findings.

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What are the deposit requirements when applying for a joint mortgage with an IVA?

It is standard practice for all mortgage lenders to conduct credit checks on individual borrowers. This procedure also applies to joint applicants. If you’re applying for a joint mortgage through a mainstream mortgage lender, there’s a good chance they will reject your application when they see that one of the applicants has an active IVA.

Fortunately, speciality lenders would be prepared to offer you a mortgage despite the active IVA.

The high-risk nature of the market they operate in means they must take various measures to lower their risk exposure and protect themselves. One way they do this is by applying larger deposit requirements on the joint mortgages they offer.

Most mortgage providers offering joint mortgages to borrowers where one of the applicants has an active IVA require a minimum deposit of 40-50%. This means they would only be willing to provide a mortgage valued at roughly half the property price. The joint applicants would have to come up with the remaining cash to repay the loan.

What are the interest rates for joint IVA mortgages?

Like the deposit requirements for joint IVA applications, you can expect the interest rate on your mortgage to be significantly higher than those for individual applicants with a clean credit record.

The higher interest rates are designed “compensate” bad credit lenders for taking on the risk associated with lending money to borrowers with an active IVA. Mainstream mortgage providers wouldn’t even think twice about rejecting a joint loan application when one of the applicants has an active IVA.

At the time of writing this, the average mortgage interest rates in the UK were 6.02% and 6.11% for a five-year and two-year fixed-rate loan, respectively. This is what individuals with a good credit history would pay. Joint mortgage applicants, where one of them has an active IVA, can expect much higher rates depending on the lender’s risk appetite.

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How will your IVA obligations affect your mortgage application?

Keep in mind that lenders also consider the issues relating to the IVA. For starters, if you have an active IVA and acquire a property holding 50% equity, you must inform your insolvency practitioner (IP). The legal implications of acquiring a high-value asset while an IVA is still in effect can be serious.

If your voluntary agreement contains a windfall clause, you must consider the implications of getting a mortgage before fully paying off the IVA. Any money you unexpectedly receive while an IVA is in force is considered a windfall. That money would have to be channelled towards your IVA.

Your mortgaged property could be rendered an asset “acquired after the fact.” Ensure you take the necessary steps to protect your interests when applying for a joint mortgage halfway through an IVA.

Lending criteria for joint mortgage applications when one applicant has an IVA

Applying for a joint mortgage with an active IVA will significantly limit the pool of providers willing to consider your application, even when one applicant has good credit. Most lenders, especially the mainstream ones, will reject your application on the spot when they see that the IVA is still in force.

The specialist lender willing to give you and your partner a joint mortgage will likely require a larger deposit and charge you higher interest rates and fees. Bad credit mortgage lenders will consider the circumstances surrounding your IVA to determine how much of a risk you pose to them. Some additional lending criteria that lenders look at during a joint mortgage assessment include:

  • Applicants’ respective ages
  • Debt to income ratio
  • Employment status
  • Joint annual income
  • Marital status

It is worth noting that when a married couple applies for a joint mortgage with one spouse having a poor credit history, the process is still the same as when unmarried or unattached individuals apply. Mortgage lenders still look at each party’s credit record to determine the risk they pose to them.

The difference comes when deciding whose name should be listed on the mortgage. If you and your partner are married, both your names must appear on the mortgage. On the other hand, unmarried or unattached applicants can opt for one or both names on the mortgage.

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Get help from an expert bad credit broker

Applying for a joint mortgage with an IVA in force is an uphill task. If you approach a mainstream lender, they will automatically decline your application the moment they see an active IVA in one applicant’s credit file.

Your best bet would be to go through a specialist broker who is experienced in helping bad credit applicants secure mortgages at competitive rates. They’ll go through your credit profiles and joint application and help you identify ways to mitigate the impact of your IVA.

They will then negotiate better mortgage terms and rates on your behalf with lenders that will likely approve your application. They are your best chance at securing a mortgage with an IVA.


How long will an IVA stay in my credit history?

An individual voluntary agreement (IVA) will remain in your credit file for six years. Any lender looking into your credit history will be able to see it when they run a credit check during their due diligence process.

An IVA in your credit file will make it difficult to secure a loan or mortgage. Most lenders won’t consider your application if you have an active IVA. Your best bet would be to go through a bad credit broker who can help you secure a mortgage from a lender with a high-risk appetite and well-versed in bad credit.

Should I settle my IVA first before applying for a mortgage?

While it is possible to get a mortgage from a specialty lender while your IVA is still in force, it would be better to wait until you’ve paid it off before you apply. This will significantly increase your chances of approval. You’ll also be able to get better terms and rates on your mortgage deal. Consult with a bad credit mortgage broker to explore your options. They have insider knowledge of the lenders that will likely approve your application.

What is the joint credit score required to secure a mortgage?

There’s no universal number that guarantees mortgage approval. Each credit reference agency has its own scoring system to gauge borrowers’ creditworthiness. Even people with good credit but inadequate credit history can still be turned down.

The best thing to do would be to keep up with any current repayments and practice good financial management to avoid picking up any new adverse credit issues that may hurt your credit score.

Start your application below now to speak about getting a joint mortgage if one of you has an IVA.

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