will make it very difficult to get a mortgage, while settled CCJs
may only have a small impact. However, there are a number of things lenders will consider when assessing your application, so it is important to speak to a mortgage broker to get an accurate assessment of your chances.
Mortgages with CCJs
A story in the Mirror newspaper on the 20th of May 2019 reported that most people consider debt to be a normal fact of life. They only begin to worry about their level of debt once they are owing more than £6,000.
Against that background of mounting debt and credit, the majority of borrowers successfully manage their financial affairs and make repayments when they fall due. Yet an increasing proportion find themselves in difficulties at one stage or another and their creditors are forced to take legal action in an attempt to recover what they are owed.
If you have been at the receiving end of such attempts to recover the money you have borrowed, you know only too well the disruption and trauma the experience is likely to have caused. If you have not already done so, you are also likely to discover that those actions are going to make it considerably more difficult to borrow or raise credit in the future.
That includes your ability to arrange probably the most significant borrowing you are likely to want – namely a mortgage to buy your home or an investment property. Though difficult, it is not impossible. So, let’s take a closer look at one of the major markers of bad credit – a County Court Judgment (CCJ) – and see what is involved in trying to raise mortgages with CCJ settled and unsettled.
What is a CCJ?
The Money Advice Service explains that a County Court Judgment (CCJ) can be sought by someone you owe money to if they have been unsuccessful in their attempts to recover the debt. The court can order you to pay the full amount immediately (known as a judgment forthwith) or allow you to repay it in installments over a specific period (judgment by instalments). To determine the repayment terms, the court requires information about your current income and expenses.
If you haven’t responded to your creditor’s claim or provided the court with your financial details, the court can still make a decision called a judgment in default. This decision may specify the instalments you need to repay or order immediate full repayment, even if you don’t have the funds. As long as you haven’t fully repaid the debt, the CCJ remains “unsettled.” Once the debt is fully repaid, it is considered “settled.”
The number of CCJs being issued has been increasing. In 2017, a record 1,138,058 CCJs were issued, the highest since records began in 2005. Can you get a mortgage with settled or unsettled CCJs? It is highly unlikely that any lender will grant you a mortgage while your CCJ remains unsettled. By allowing the debt to accumulate, not responding to your creditor, and receiving a CCJ, you haven’t demonstrated your ability to meet its terms. The availability of mortgages for unsettled CCJs is extremely limited.
Once you have settled a CCJ, the situation may improve slightly. The County court judgement will stay on your credit report for at least six years, indicating an adverse credit report. However, settling the CCJ shows that you were able to manage your finances well enough to repay the debt. Some lenders may take a more lenient approach and consider granting you a mortgage. While obtaining a mortgage with a satisfied CCJ may be challenging, it is not impossible.
I had a ‘judgment in default’. Can I still get a mortgage?
Obtaining a mortgage with a “judgment in default” can be challenging, but it is not impossible.
A judgment in default occurs when you fail to respond to your creditor’s claim and provide the court with your financial information. This can negatively affect your creditworthiness and make lenders hesitant to approve a mortgage. It will degrade your credit report and you may not be able get a mortgage.
However, there are lenders who may consider your application, especially if you have made efforts to improve your financial situation since the judgment. It’s important to demonstrate responsible financial behavior and a consistent repayment history after the judgment. Building a positive credit history and saving for a larger down payment can also improve your chances of getting a mortgage.
It’s advisable to consult with mortgage brokers or lenders who specialize in assisting individuals with adverse credit histories. They can provide guidance and explore options that may be available to you based on your specific circumstances.
What deposit will I need if I’ve had a CCJ?
Lenders tend to approach mortgage applications from individuals who have settled a County Court Judgment (CCJ) with caution. This caution typically translates into a requirement for a larger deposit on your part. Essentially, you bear a greater portion of the risk in the eyes of the lender. While someone with a clean credit history might be able to secure a mortgage covering up to 90% or even 95% of the home’s purchase price, if you have a settled CCJ, that percentage may drop to 75% or 85%. In simpler terms, you may be offered a lower loan-to-value (LTV) ratio, meaning you’ll need to come up with a larger deposit..
How much can I borrow if I’ve had a CCJ?
The amount you can borrow if you have had a County Court Judgement will depend on a number of factors, including:
- The amount of the CCJ
- The age of the County Court Judgement
- Your credit score
- Your income and outgoings
- Your employment history
In general, specialist lenders will be more willing to lend to you if the CCJ is old, you have a good credit report, and you have a stable income. However, even if you meet these criteria, you may still be offered a lower mortgage amount or a higher interest rate than someone who does not have a CCJ.
If you have a CCJ, it is important to speak to a specialist mortgage broker who can help you find a lender who is willing to lend to you. An experienced broker will be able to assess your individual circumstances and find the best mortgage deal for you.
How can I improve my chances of getting accepted for a mortgage when I have a CCJ?
Here are some things you can do to improve your chances of getting accepted for a mortgage when you have a CCJ:
- Settle the CCJ as soon as possible. This will show lenders that you are serious about repaying your debts and that you are willing to take responsibility for your financial situation.
- Make sure you have a good credit score. You can check your credit report for free on a number of websites, such as Experian and ClearScore. A good credit score will show lenders that you are a reliable borrower and that you are likely to repay your mortgage on time.
- Get a letter from your creditor stating that they are satisfied with your repayments. This will show lenders that you are making your payments on time and that you are not a high-risk borrower.
- Speak to a mortgage broker who can help you find a lender who is willing to lend to you. A mortgage broker will be able to assess your individual circumstances and find the best mortgage deal for you.
It is important to remember that getting a mortgage with a CCJ is possible, but it will be more difficult. By taking steps to improve your adverse credit score and overall financial situation, you can increase your chances of being approved for a mortgage.
Here are some additional tips that may help you improve your chances of getting a mortgage with a CCJ:
- Save up a larger mortgage deposit. Lenders are more likely to lend to borrowers with a larger deposit. If you have a good-sized deposit amount, half of your problems will be solved.
- Get a letter from your employer stating that you have a stable job. This will show lenders that you have a steady income and that you are less likely to default on your mortgage payments.
- Reduce your other debts. The lower your overall debt, the more likely you are to be approved for a mortgage.
- Be prepared to answer questions about the CCJ. Lenders will want to know why you got the CCJ and what you have done to address the issue. Be honest and upfront about your situation.
If you have a CCJ, it is important to remember that you are not alone. Millions of people in the UK have CCJs and are able to get mortgages. By taking steps to improve your credit score and overall financial situation, you can increase your chances of being approved for a mortgage.
Which mortgage lenders accept CCJs while accessing mortgage applications?
There are a number of mortgage lenders who will consider applications from people with CCJs on their credit files. However, it is important to note that the terms and conditions of these mortgages may be more expensive than those offered to borrowers with a good credit history.
Some of the mortgage lenders who accept CCJs include:
- Atom Bank
- Lloyds Bank
- Nationwide Building Society
- Skipton Building Society
- Yorkshire Building Society
It is important to shop around and compare the terms and conditions of different mortgages before applying. You should also be prepared to provide evidence that you have been able to manage your finances responsibly since the CCJ was issued.
Here are some tips for getting a mortgage with a CCJ:
- Make sure you have a good credit score. This means paying your bills on time and keeping your credit utilization low.
- Get a copy of your credit report and dispute any errors. This will help to improve your credit score.
- Be prepared to explain the CCJ to the lender. Explain what happened and how you have since managed your finances.
- Offer to provide additional information to the lender. This could include proof of income, employment, or assets.
- Be patient. It may take longer to get approved for a mortgage with a CCJ.
If you have a CCJ and are looking to buy a home, it is important to speak to a mortgage advisor. They can help you to understand your options and find the best mortgage for your needs.
A County Court Judgment (CCJ) can have a significant impact on your credit rating, making it difficult to get a mortgage or other forms of credit.
However, there are some street lenders who are willing to lend to borrowers with CCJs. If you have a CCJ, it is important to take steps to improve your credit score and overall financial situation. This will increase your chances of being approved for a mortgage.
If you have a CCJ and are looking for a mortgage, it is important to speak to a specialist bad credit mortgage broker. A mortgage broker will be able to assess your individual circumstances and find the best mortgage deal for you.
We are a specialist bad credit mortgage broker who can help you get a mortgage with a CCJ. We have a team of experienced mortgage advisors who will work with you to find the best mortgage deal for your needs. Contact us today to find out more.
FAQs- Mortgage for CCJs
What is a CCJ?
A CCJ is a County Court Judgment. It is a court order that is issued against someone who has failed to pay a debt. CCJs can have a negative impact on your credit score and make it more difficult to get a mortgage.
Can I get a mortgage with a CCJ?
It is possible to get a mortgage with a CCJ, but it will be more difficult. You will need to find a lender who is willing to lend to people with bad credit. You may also need to pay a higher interest rate or make a larger deposit.
What factors will lenders consider when I apply for a mortgage with a CCJ?
Lenders will consider a number of factors when you apply for a mortgage with a CCJ, including:
- The amount of the CCJ
- The age of the CCJ
- Your income and employment history
- Your credit score
- Your deposit
What can I do to improve my chances of getting a mortgage with a CCJ?
There are a number of things you can do to improve your chances of getting a mortgage with a CCJ, including:
- Pay off the CCJ as soon as possible.
- Get a copy of your credit report and dispute any errors.
- Increase your income and employment history.
- Make sure you pay all your bills on time.
- Keep your credit utilization low.
- Get a secured credit card.
- Wait for the CCJ to fall off your credit report.
How long will a CCJ stay on my credit report?
CCJs will stay on your credit report for six years. After six years, the CCJ will fall off your credit report and will no longer have an impact on your credit score.
What should I do if I have a CCJ and I am thinking about buying a house?
If you have a CCJ and you are thinking about buying a house, it is important to speak to a mortgage broker. A mortgage broker will be able to help you find a lender who is willing to lend to you and they will be able to advise you on the best way to improve your credit score.