IVA Remortgages Explained

An IVA Mortgage or Remortgage is an adverse credit product designed to aid an individual either still involved with an IVA or having recently completed an IVA.

Whilst an IVA offers a unique opportunity to manage yourself out of debt, the five year term can hinder your borrowing plans for the future. An IVA Remortgage was born from a need to service the ever increasing population of sub-prime borrowers. Releasing valuable equity from your home, can allow you to pay off an existing IVA early, usually within the forth or final year of term.

Sub prime lending has come under flak recently in light of the current financial climate; however the growing need for adverse credit has forced banks to expand the options available. Most high street brands will not offer mortgage products to those with a bad credit score; however these same banks will all most certainly have a division, usually web based to cater for the sub-prime market.

These specialist brokers are prepared to loan you money against your home, but at a premium, expect to pay in the region of 8.0% APR for most remortgages but I does depend on your individual situation meaning rates can be more competitive. But remember whilst clearing an existing IVA may seem like a good idea the consequential remortgage will have a far longer repayment term, tying you into further albeit smaller repayments. That said the sooner an IVA is paid off the better, your credit score will start to recover as debts secured against your home are looked at differently in respect of adverse credit.