Individual Voluntary Agreement Mortgages

Individual Voluntary Agreement Mortgages

Individual voluntary agreement mortgages are those mortgages that are especially designed to help people that have entered into an individual voluntary agreement. The purpose of the mortgage is to help a person manage their outstanding debts in a more efficient manner. An Individual Voluntary Agreement is a contract that is legal and formal and exists between the debtor and his or her creditors. The agreement itself involves a contract in which the debtor agrees to make monthly payments to the creditor for a certain period of time. At the end of that time period, all the debts owed by the debtor will be cancelled and he or she will then be debt free.

Individual voluntary agreement – voluntary for both parties

As the name implies, an individual voluntary agreement is voluntary for both the parties to the agreement. This is why in cases of extreme debts; the creditors will not be willing to enter into an agreement which in turn means that the debtor may be forced to declare themselves bankrupt.

Negative impact

An individual voluntary agreement will have a negative impact on your credit ratings which means that obtaining credit after an IVA will be much harder. This holds true for mortgages as well. If you are still keen on availing of individual voluntary agreement mortgages, then you must look for companies that specialize in giving individual voluntary agreement mortgages. The good news is that there are several lenders that will be ready to provide you with individual voluntary agreement mortgages.

Credit rating falls

However, there is a problem with entering into an individual voluntary agreement. This is that not only does the credit rating come down following such an agreement but it will remain down for a further six years after the completion of the agreement. In this, the individual voluntary agreement works just like a bankruptcy. That means that obtaining mortgages can prove to be very difficult. However, it is easier to obtain individual voluntary agreement mortgages than normal mortgages.

Therefore, it makes sense to find the best lending companies that specialize in offering individual voluntary agreement mortgages. These lenders, before offering individual voluntary agreement mortgages, will take a close look at the date when the individual voluntary agreement was satisfied and will offer various kinds of lending conditions.

Before offering individual voluntary agreement mortgages, the lender will also look at CCJs and arrears as well as will look at your repayment record. Also, rates for individual voluntary agreement mortgages tend to be higher as compared to a normal mortgage. This is because the applicant is considered a higher risk and so the rates for individual voluntary agreement mortgages will be higher.

The good news is that individual voluntary agreement mortgages offer the best means of obtaining mortgages and will go a long way in helping to restore the borrower's credit rating. This means that after obtaining individual voluntary agreement mortgages, you can improve your credit score sufficiently to ensure that you are then able to remortgage at a later date in the near future and at rates that are much more attractive.

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